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Begin part 3 of 3
THE PLAYS
Good movers: LCAV; NMG.A; VLO
New Pre-Split Plays:
Play Date: 03/17/2005
ADBE (Adobe Systems--$63.89; +0.70; optionable): Application software. Splits 2:1 on 5-29-05
http://biz.yahoo.com/p/a/adbe.html
After Hours: $65.26
STATUS: Test 50 day EMA. ADBE announced a split after the close, at a much lower price than prior splits. Not a bad strategy as it is in a very good price pattern right now, a 15 week reverse head and shoulders base that has just tested the 50 day EMA (62.02), showing a doji over that level Thursday as volume moved back above average. Good money flow leading higher and relative strength ready to make the breakout. It was up near the breakout point after hours on the news. Looking for it to hold the initial test of the move. when it does and starts to rebound that will be our entry point.
Volume: 2.843M Avg Volume: 2.317M
BUY POINT: $65.89 Volume=3M Target=$74 Stop=$63.94
POSITION: AEQ GM - July $65c (49 delta) &/or Stock
http://www.investmenthouse.com/cs/adbe.html
Play Date: 03/17/2005
MGG (MGM Mirage--$75.87; +0.52; optionable): Resorts and casinos. Splits 2 for 1 on 5-19-05
http://biz.yahoo.com/p/m/mgg.html
STATUS: Flat base. MGG is moving laterally over the 50 day EMA (73.46) the past 6 weeks, coming off that level this week on strong volume Tuesday. It has slid laterally the past two sessions in a tight, narrow range on very low, below average volume. That quiet, tight range often precedes the break higher.
Volume: 486.1K Avg Volume: 960.636K
BUY POINT: $77.12 Volume=1.2M Target=$85 Stop=$74.78
POSITION: MGG FO - June $75c (61 delta)
http://www.investmenthouse.com/cs/mgg.html
New Leader Plays:
Play Date: 03/17/2005
TDY (Teledyne Technologies--$32.29; +1.09; optionable): Technical services
http://biz.yahoo.com/p/t/tdy.html
STATUS: 50 day EMA test. Strong volume Thursday as TDY moved off the 50 day EMA (30.54), continuing the breakout from its 12 week cup with handle base. It broke to a new closing high Thursday in a weak market. Strong 5 to 2 accumulation in the pattern. Relative strength is making the breakout as well, a very strong confirmation of the breakout move.
Volume: 251.1K Avg Volume: 193.545K
BUY POINT: $32.41 Volume=290K Target=$38 Stop=$31.32
POSITION: TDY GF - July $30c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/tdy.html
Continuing Leader Plays:
Play Date: 03/07/2005
ORBK (Orbotech--$22.75; -0.02; optionable): Business software.
http://biz.yahoo.com/p/o/orbk.html
STATUS: Cup w/handle. Strong volume Thursday as ORBK banged its head into resistance at 23, but it was unable to hold the move. that volume is a get ready spike, showing big money moving in. To recap: ORBK tried the breakout from its 14 month base two weeks back. It could not keep the move going in the weakening market, but it did not roll over. It eased back to the 50 day EMA (21.84) and is now holding, looking for the break higher. Accumulation in the pattern is excellent at 18 to 9 (18 up price weeks on rising volume to 9 down price weeks on rising volume), showing a lot of buyers as it consolidated. Money flow is strong and has turned even higher as the stock makes this test. That is a positive divergence that indicates the stock will most likely resume its move.
Volume: 347.959K Avg Volume: 145.136K
BUY POINT: $23.75 Volume=229K Target=$27.95 Stop=$22.55
POSITION: OKQ GX - July $22.50c (69 delta) &/or Stock
http://www.investmenthouse.com/cs/orbk.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: Forecast 4-20-05
ARO: No split announcement 3-10-05. A very nice lateral, low volume move setting up the breakout. Looks nice.
BSC: No split announced 3-16-05 before the open. The brokers refuse to announce splits thus far. Sold on the solid earnings but started to recover Thursday, holding the 50 day EMA. Anticipating it will rebound and give us a good move from here.
CDIS: Tentatively set for 5-2-05. Still struggling to get up off the 50 day EMA and over the 18 day EMA.
COO: Forecast 3-22-05 with the annual shareholder meeting. Nice 50 day EMA test. Could give us a good move off this level.
CTSH: Forecast 4-11-05 or 4-19-05.
CVH: Tentatively forecast 5-3-05 before the open.
FDX: Forecast 3-17-05 before the open. No announcement but has tested the 50 day EMA and is trying to make the rebound.
GPN: Forecast 3-21-05 after the close.
GS: Forecast 3-17-05 before the open. Another broker that did not announce even with good earnings. Tapped the 50 day and recovered. May give a breakout from here; need to see it on volume to move in on a pure technical trade.
GVA: Forecast 4-27-05.
IEX: Forecast to announce on or about 4-21-05
IHP: Forecast 4-8-05 in conjunction with a board meeting.
IR: Forecast 4-6-05 with a board meeting or 4-9-05 with earnings.
LEH: Tentatively forecast 3-24-05.
LLL: Researching exact date. Looking for mid-April.
NKE: Forecast 3-17-05 after the close. No announcement thus far but a good move after hours.
OMC: Forecast 4-26.05 in conjunction with earnings or 5-24-05 with a board meeting.
ORLY: Forecast 4-26-05.
SIE: Forecast 4-25-05
STR: Early May. Excellent breakout test underway.
TOL: Forecast 3-17-05 in conjunction with its annual shareholders meeting. No announcement and never gave us much of an entry chance.
TTC: Tentatively forecast 5-24-05.
VLO: Forecast mid-April.
ZQK: No split announced 3-9-05. Still solid with a 10 day EMA test.
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: 03/17/2005
ESRX (Express Scripts--$82.12; -0.58; optionable): Mail order prescription plans. Tentatively forecast 4-26-05.
BACKGROUND: Last announced a 2 for 1 split in February 2001 at $88.
http://biz.yahoo.com/p/e/esrx.html
After Hours: $82.12
STATUS: Breakout test. Excellent test underway of the early March gap higher that sent ESRX vaulting out of its 11 month base. Solid earnings shot it up like a canon, and now it is testing the move, holding at the 18 day EMA (81.98) in the market selling. Volume has been lower and near average on the test, showing little selling. Looking for this test to hold and the stock to resume the breakout move on volume to start our positions.
Volume: 708.81K Avg Volume: 745.727K
BUY POINT: $83.35 Volume=900K Target=$94 Stop=$81.78
POSITION: XTQ HQ - Aug. $85c (47 delta) &/or Stock
http://www.investmenthouse.com/cs/esrx.html
Play Date: 03/17/2005
PD (Phelps Dodge--$107.32; +2.72; optionable): Copper. Forecast to announce a split in late April.
BACKGROUND: No splits in PD's history.
http://biz.yahoo.com/p/p/pd.html
STATUS: Breakout test. They say the economy is built with a copper roof, and PD is in good position to make the move to the next roof (had to try and work that one in). Thursday it was up off the 18 day EMA (103.68) on stronger, average trade as it starts to resume its breakout move. It jumped higher in late February on strong trade, breaking out from a 5 month ascending base. It moved laterally the past three weeks, holding the 18 day as the oils and materials went through a consolidation/correction. PD did not correct, just caught its breath. Looks ready to resume the run as relative strength broke out today ahead of the stock as it moved higher. Looking to move in as it continues the move on some even better volume.
Volume: 2.594M Avg Volume: 2.248M
BUY POINT: $107.65 Volume=2.6M Target=$120.55 Stop=$104.74
POSITION: PD GB - July $110c (51 delta) &/or Stock
http://www.investmenthouse.com/ct/pd.html
Continuing Pre-Announcement Plays:
Buy not yet hit:
Play Date: 03/10/2005
IR (Ingersoll-Rand--$83.94; +0.92; optionable): Diversified machinery. Forecast mid-January. Researching exact date.
BACKGROUND: Last announced a 3 for 2 split in August 1997 at $63. Prior to that announced a 2 for 1 split in May 1994 at $61.
http://biz.yahoo.com/p/i/ir.html
STATUS: Breakout test. Nice test of the break higher continues with IR testing the 18 day EMA (83.58) on below average volume. This low volume pullback as the market sold is a good sign of little selling and sets up the rebound. To recap: IR made us a decent gain on our option play on the recent breakout from its 10 week double bottom with handle base. It rallied to 87.50 on that move and has come back to test, tapping the 18 day EMA. Solid money flow and relative strength is hanging right in there.
Volume: 1.139M Avg Volume: 1.193M
BUY POINT: $85.05 Volume=1.7M Target=$92 Stop=$83.35
POSITION: IR FQ - June $85c (55 delta)
http://www.investmenthouse.com/cs/ir.html
Play Date: 03/15/2005
LLL (L-3 Communications--$74.90; +0.25; optionable): L-3 Communications. Somewhat of a wildcard as it is a bit early, but a nice pattern. Looking for a split announcement in April if it gives us a run.
BACKGROUND: Last announced a 2:1 split 4-32-02 at $125.
http://biz.yahoo.com/p/l/lll.html
STATUS: Cup w/handle. Continues forming the lower volume handle to its base, holding over the 18 day EMA (74.14), a natural support level. To recap: A nice 11 week base has formed along the 50 day EMA (72.85), an important support level where the big money steps in to buy or sells. They supported the stock, and it has finished its base. It is working laterally on lower, below average volume as it has formed the handle to the base, the lateral and lower move where the stock shakes out the last sellers. Excellent 4 to 1 accumulation in the base has set up the breakout. Relative strength is ready to make the breakout, a good sign for the stock. Looking for a solid volume jump as it makes the breakout move.
Volume: 452.7K Avg Volume: 799.227K
BUY POINT: $77.02 Volume=1.2M Target=$83.95 Stop=$74.48
POSITION: LLL GO - July $75c (59 delta)
http://www.investmenthouse.com/cs/lll.html
Play Date: 03/15/2005
SIE (Sierra Health Services--$61.99; +0.57; optionable): Health care plans. Forecast to announce a split on 4-25-05 in conjunction with earnings.
BACKGROUND: Last announced a 3 for 2 split in May 1998 near $40.
http://biz.yahoo.com/p/s/sie.html
STATUS: Test 18 day EMA. Still in the nice test of the breakout in late February. Volume edged higher off the 18 day EMA (61.42) Thursday. That creeping volume indicates it is moving up to continue the breakout move. To recap: SIE is in a long upside run. It recently broke out from a short 10 week double bottom with handle base that formed along the 50 day EMA (58.83) It broke higher in late February and ran to 65 on that move. During the recent market selling it has eased back to the 18 day EMA on lower, below average volume. Trade has picked up this week, moving back close to average Tuesday as it moved up and off the 18 day. Looking for continued volume to start positions. Nice test.
Volume: 314.9K Avg Volume: 324.5K
BUY POINT: $62.25 Volume=400K Target=$69.95 Stop=$61.05
POSITION: SIE IL - Sept. $60c (63 delta) &/or Stock
http://www.investmenthouse.com/cs/sie.html
POST SPLIT PLAYS:
Play Date: 03/16/2005
JOYG (Joy Global--$36.63; +0.52; optionable): Farm and construction machinery
http://biz.yahoo.com/p/j/joyg.html
STATUS: Breakout test. Volume edged higher but was still below average Thursday as JOYG moved off the 18 day EMA (35.57). Looks solid and we want to see more volume as it continues the move. to recap: JOYG split in January, right in the middle of its 8 week cup with handle base that formed over the 50 day EMA (32.27), an important institutional support level. Strong 3 to 0 accumulation in the pattern (3 up price weeks on rising volume to 0 down price weeks on rising volume) shows all buyers as it based, setting up the breakout and rally. It exploded higher to end February, and has come back the past two weeks to test the breakout, holding above the 18 day EMA on very low, below average volume. That shows few sellers on the test. Money flow is excellent and relative strength broke out on the move. Looking for volume to rebound as it bounces higher from this test. That is when we step in.
Volume: 672.802K Avg Volume: 850.318K
BUY POINT: $36.55 Volume=950K Target=$42.45 Stop=$35.27
POSITION: JQY GG - July $35c (63 delta) &/or Stock
http://www.investmenthouse.com/cs/joyg.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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