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Begin part 3 of 3
THE PLAYS
Good movers: AN; LOW; SSI
New Pre-Split Plays:
Play Date: 04/16/2005
STZ (Constellation Brands--$55.55; -1.45; optionable): Wineries and distilleries. Splits 2:1 on 5-16-05.
http://biz.yahoo.com/p/s/stz.html
After Hours: $56
STATUS: Breakout test. STZ made us a nice quick gain on the split announcement as it gapped higher and ran some. We took that gain but said we would let it make the test and fill the gap and then be ready to play this strong leading stock on its pre-split run. It ended the week selling back with the rest of the market, but volume faded as it made the pullback to fill the gap as it tests the 18 day EMA (55.04). It is not quite there, so we are looking for it to complete the test and then rebound to give us the entry point. It has the added advantage of being a 'vice' stock in an economy that is perceived to be slowing. That will help give it an added boost.
Volume: 911.4K Avg Volume: 626.454K
BUY POINT: $56.24 Volume=940K Target=$63 Stop=$54.98
POSITION: STZ GK - July $55c (60 delta) &/or Stock
http://www.investmenthouse.com/cs/stz.html
New Post-Split Plays:
Play Date: 04/16/2005
JOSB (Joseph A. Banks--$34.08; +0.06; optionable): Business clothes
http://biz.yahoo.com/p/j/josb.html
After Hours: $34.19
STATUS: Flying plateau. JOSB is moving laterally the past two weeks over the 10 day EMA (33.51), showing tremendous strength as the rest of the market sells off. JOSB exploded out of a 20 week cup with handle base of sorts on excellent earnings news. It has not given back any gains in the market selling. Looking for it to hold the test of the 10 day and continue the move higher. Friday it tapped the 10 day EMA on the low and then rebounded for a gain on rising, above average volume. Looking for that same volume as it continues higher. Of course, relative strength broke out on this move as it gained while the market dove.
Volume: 680.248K Avg Volume: 391.523K
BUY POINT: $34.95 Volume=675K Target=$40.45 Stop=$33.38
POSITION: QZS GG - July $35c (48 delta) &/or Stock
http://www.investmenthouse.com/cs/josb.html
Play Date: 04/16/2005
PDCO (Patterson Dental--$51.68; +0.63; optionable): Medical equipment
http://biz.yahoo.com/p/p/pdco.html
After Hours: $51.77
STATUS: Ascending base. PDCO is close to turning into a pre-announcement play, and a good break higher here will likely do it. Volume surged Friday as it did with many stocks, but this was a positive as PDCO surged off the 18 day EMA (50.59), riding the volume toward. It is at the breakout point from its 10 week base sporting 4 to 1 accumulation. Excellent money flow is leading higher. Relative strength broke out Friday even before the stock, a very good sign the stock is going to make the breakout as well.
Volume: 1.181M Avg Volume: 729.363K
BUY POINT: $52.12 Volume=1.1M Target=$56.25 Stop=$50.89
POSITION: DOU GJ - July $50c (75 delta) &/or Stock
http://www.investmenthouse.com/cs/pdco.html
Continuing Leader Play: Great volume as it readies for the next move.
Play Date: 04/14/2005
HYTM (Hythiam--$8.30; +0.03; no options): Specialized health services
http://biz.yahoo.com/p/h/hytm.html
STATUS: Ascending triangle. Volume surged again Friday as HYTM posted a most modest move off the 18 day EMA (8.08) as it continues to look for the breakout from its nice little base that has formed above the 50 day EMA (7.82). Looks ready. To recap: Volume is surging the past week as HYTM makes a higher low at the 18 day EMA in its 7 week base that has formed using the 50 day EMA as support. A higher low in these patterns often indicates a breakout ahead. Excellent 3 to 0 accumulation in the base shows all buyers (3 up price weeks on rising volume to 0 down price weeks on rising volume). Money flow is surging higher ahead of price and with volume working for it as well, it is ready. A breakout sends it to an all-time high for this 15 month old stock. Very nice.
Volume: 348.182K Avg Volume: 107.5K
BUY POINT: $8.55 Volume=155K Target=$10.25 Stop=$8
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/hytm.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.
AHC: Forecast 4-26-05
AMHC: Researching date.
APPX: New information: Forecast 5-4-05
BOL: Forecast 4-19-05 before the open.
CNMD: Forecast 5-17-05
CTSH: Forecast 4-19-05. Not the kind of dive we wanted right before the potential announcement. Will see if it can recover early this week but risking to move in on this falling knife.
CVH: Tentatively forecast 5-3-05 before the open.
DGX: Forecast 4-21-05.
DIOD: Forecast 4-28-05
DVA: Forecast 5-18-05.
ESRX: Forecast 4-26-05.
GOOG: Forecast 4-21-05
GPN: No split announced 3-21-05. Fading from the 18 day EMA but no collapse
GYI: Forecast 4-20-05
IEX: Forecast to announce on or about 4-21-05. Another hard dive low is destroying the play.
JAH: Forecast 4-28-05
KSWS: Forecast 4-28-05
OMC: Forecast 4-26-05 in conjunction with earnings or 5-24-05 with a board meeting.
ORLY: Forecast 4-26-05. Now it is diving below the 50 day EMA and will need a lot of work to recover.
PFCB: Forecast 4-27-05
SHLD: Forecast 4-21-05. Trying to hold the 18 day EMA.
SIE: Forecast 4-25-05. Showed a doji Friday on lower volume, and may be trying to stem the selling and recover the 50 day EMA (60.95).
STR: Early May. Has fallen apart with a drop below the 50 day EMA.
UNH: Forecast 5-12-05 with a board meeting. Has sold to the 50 day EMA and now attempting to hold that level.
VLO: Forecast 4-27-05.
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: These are in the right sectors for the current market.
Play Date: 04/16/2005
FO (Fortune Brands--$87.03; +0.12; optionable): Consumer products. Forecast to announce a split 4-22-05
BACKGROUND: No splits in FO's history.
http://biz.yahoo.com/p/f/fo.html
After Hours: $86.97
STATUS: Breakout test. Volume surged the past two weeks as FO made the breakout from its 9 week double bottom base that formed using the key 50 day EMA (82.77) as support. That is where institutions will step in to buy their stocks if they still want to accumulate shares. FO shows solid 4 to 2 accumulation (4 up price weeks on rising volume to 2 down price weeks on rising volume) in the pattern; the institutions are indeed still buying it. After the breakout FO has held solid, tapping at the 10 day EMA (85.89) Thursday and Friday but easily holding above that level. Strong money flow is leading higher and relative strength is breaking out again even as FO makes this modest pullback. Solid action. May take another day or two to complete the test, but we want to be ready when it resumes the breakout move.
Volume: 955.2K Avg Volume: 605.545K
BUY POINT: $87.55 Volume=908K Target=$99 Stop=$85.65
POSITION: FO IQ - Sept. $85c (69 delta) &/or Stock
http://www.investmenthouse.com/cs/fo.html
Play Date: 04/16/2005
CI (Cigna--$90.03; +0.39; optionable): Health care plans. Forecast 5-4-05
BACKGROUND: Last announced a 3:1 split on 4-22-98 at $180. A 3:2 split puts it right at the same post-split point.
http://biz.yahoo.com/p/c/ci.html
STATUS: Cup w/handle. CI has formed a short but very nice 7 week base over the 50 day EMA (87.33), setting up for the breakout to a three year high. It got a small case of the dips on the UNH earnings, but it held the 18 day EMA (89.48) on the pullback, setting up the handle to its base. Positive 2 to 1 accumulation in the pattern shows net buyers in this strong leader. Excellent money flow and a relative strength breakout to end the week as it held its ground as the rest of the market sold off. It is ready to make its move.
Volume: 1.341M Avg Volume: 1.083M
BUY POINT: $91.65 Volume=1.6M Target=$100 Stop=$89.25
POSITION: CI GR - July $90c (55 delta)
http://www.investmenthouse.com/cs/ci.html
Play Date: 04/16/2005
XRAY (Dentsply--$54.94; -0.3; optionable): Medical instruments. Forecast 4-25-05 after the close.
BACKGROUND: Last announced a 3:2 split 12-12-01 at $46.80.
http://biz.yahoo.com/p/x/xray.html
After Hours: $55.17
STATUS: Cup w/handle. XRAY sold off in late February and March, but bottomed at the 200 day SMA (53.12), rallying into early April. It has come back the past week on very low volume, holding above the 50 day EMA (54.77) on this test. Friday volume surged back to average as the stock held this support. A nice 11 week base showing strong money flow. Looking for an even better surge in volume to enter the play.
Volume: 495.354K Avg Volume: 473.5K
BUY POINT: $56.22 Volume=700K Target=$62 Stop=$54.98
POSITION: XEQ GK - July $55c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/xray.html
Continuing Pre-Announcement Plays:
Buy not yet hit:
Play Date: 04/12/2005
AMHC (American Healthways--$35.43; -0.02; optionable): Specialized health services. Just announced earnings in March. Researching to pinpoint date.
BACKGROUND: Last announced a 2:1 split 11-19-03 at $41.20. Prior to that a it announced a 3:2 split on 10-29-01 at $38.50.
http://biz.yahoo.com/p/a/amhc.html
After Hours: $35.35
STATUS: Test breakout. After fading to the 18 day EMA (34.93) on the Thursday selling, AMHC held steady Friday, showing a very tight doji above that key near term support level as volume ticked higher. Set up very well to make the rebound from here. To recap: AMHC blasted higher to start the month, surging on strong volume out of an 18 week trading range between 30 and 35. AMHC formed the base along the 50 day EMA (33.70) as the big money stepped in to support the stock and accumulate shares at that point. Strong 6 to 3 accumulation in the base (6 up price weeks on rising volume to 3 down price weeks on rising volume) set up the breakout, showing plenty of buyers as the stock consolidated. Nice lower volume test is setting up the next move. Excellent money flow is leading higher and relative strength broke out on the recent move, a good corroboration of the price breakout. Nice pullback has set up the continued breakout run.
Volume: 385.814K Avg Volume: 497.203K
BUY POINT: $36.62 Volume=713K Target=$42.55 Stop=$35.22
POSITION: QMH HG - Aug. $35c (63 delta) &/or Stock
http://www.investmenthouse.com/cs/amhc.html
New Buy Points on Current Plays:
We often like to add to current positions on strong, leadership stocks when the opportunity arises. There is nothing like a proven winner, especially when the market is this weak.
Play Date: 03/29/2005
APPX (American Pharmaceutical--$55.12; -0.61; optionable): Drugs. Forecast to announce a split 5-4-05.
BACKGROUND: Last announced a 2 for 1 split on 3-4-02 in conjunction with a board meeting. The stock price was $52. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/a/appx.html
After Hours: $55.10
STATUS: Breakout test. Excellent doji at the 18 day EMA (54.49) as APPX has come back to test the early April break higher from its 11 week ascending triangle base. The base formed above the 50 day EMA (51.18), a key support level. Strong money flow and relative strength ready for the next breakout. Looking to move in again on a higher volume move through the 10 day EMA (55.52).
Volume: 637.644K Avg Volume: 596.636K
BUY POINT: New positions: $55.68 (orig. positions: $54.91) Volume=975K Target=$62.45 Stop=$54.38
POSITION: AQO GK - July $55c (49 delta) &/or Stock
http://www.investmenthouse.com/cs/appx.html
Play Date: 03/29/2005
CNMD (Conmed--$30.72; -0.15; optionable): Medical appliances and equipment. Forecast to announce on May 17 with its annual shareholder meeting.
BACKGROUND: Last announced a 3 for 2 split on 8-9-01 in conjunction with a board meeting. The stock price was $32. The annual shareholder meeting is scheduled for 5-17-05 at 3:30 ET. The company has sufficient shares for a 3 for 2 split.
http://biz.yahoo.com/p/c/cnmd.html
After Hours: $30.78
STATUS: Breakout test. CNMD surged out of a 16 week flat base in early April, rallying over 32 on the move. It has come back to test the move and hold the 18 day EMA (30.60) the past week on low volume even as the market sold off on strong volume. Friday CNMD showed a nice hammer doji over the 18 day ad volume moved back above average. Ready to move in on a strong volume surge that takes it through the next buy point.
Volume: 251.072K Avg Volume: 205.149K
BUY POINT: New positions: $31.35 (orig. positions: $30.88) Volume=300K Target=$34.98 Stop=$30.55
POSITION: KQD HF - Aug. $30c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/cnmd.html
Play Date: 04/05/2005
ESRX (Express Scripts--$85.27; +0.57; optionable): Mail order prescription plans. 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: $85.41
STATUS: Double bottom w/handle. ESRX bucked the overall market trend Thursday and Friday, holding near the 18 day EMA (85.28) as volume shot higher. ESRX tried to make the next move Friday in the face of a selling market, hitting 87.40 on the high before fading back. Showing excellent relative strength as RS breaks out ahead of the stock. To recap: ESRX has formed a short, neat 5 week base that is working to consolidate the strong gap higher in early March on a very strong earnings report and outlook. This sideways base is working to set up the next buy point. Money flow remains strong and is leading higher ahead of the stock. Looking for the price and volume to follow it higher and give us another good entry point.
Volume: 1.692M Avg Volume: 820.227K
BUY POINT: Aggressive: $85.95; breakout: $87.81 Volume=1.2M Target=$94 Stop=$84.38
POSITION: XTQ HQ - Aug. $85c (62 delta)
http://www.investmenthouse.com/cs/esrx.html
POST-SPLIT PLAYS:
Play Date: 04/14/2005
USNA (Usana Health Science--$46.23; +0.03; optionable): Drug related products
http://biz.yahoo.com/p/u/usna.html
After Hours: $46.03
STATUS: Test 50 day EMA. Friday USNA showed uncommon strength in a diving market. It basically held steady at the 18 day EMA (46.29), trading in a tight range on rising though still below average volume. Love to see that kind of strength; it is ready to make the upside move if it gets an opening. To recap: USNA made us some good money before, and now it is set up to do it again. Further, it will turn into a pre-announcement play if it makes the move we want to see. Strong run from February to late March following the breakout from its 17 week cup with handle base. Big run and has eased back on low, below average volume to the 50 day EMA (44), a key support level if a stock is going to continue its run. Last Thursday volume jumped as the stock moved off the 50 day and up to the 18 day EMA. A strong stock, and we are looking for it to move through the short term MA on above average volume to enter the position.
Volume: 310.978K Avg Volume: 313.045K
BUY POINT: $46.42 Volume=425K Target=$52 Stop=$44.78
POSITION: UNX GI - July $45c (63 delta) &/or Stock
http://www.investmenthouse.com/cs/usna.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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