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Begin part 3 of 3
THE PLAYS
Good movers: DRIV; JOYG; VLO
New Post-Split Plays:
Play Date: 08/13/2005
ESRX (Express Scripts--$54.75; +0.15; optionable): Mail order prescriptions
http://biz.yahoo.com/p/e/esrx.html
After Hours: $54.65
STATUS: Test breakout. ESRX split in late June as it just started into a short 6 week cup base that formed right on top of the 50 day EMA (50.66), using that key support as the floor to build upon. It broke higher to start August, rallying to 55.85 on the move. It has settled back the last half of last week, tapping and holding the 10 day EMA (54.11) as the market sold. Showing excellent relative strength and nice low volume on the test, indicating very few sellers. Looking for it to hold here and deliver a solid move off this level on some rising, above average volume to enter the play.
Volume: 1.256M Avg Volume: 1.34M
BUY POINT: $55.21 Volume=1.6M Target=$62.35 Stop=$53.85
POSITION: XTQ KK - Nov. $55c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/esrx.html
Play Date: 08/13/2005
ATVI (Activision--$19.63; -0.25; optionable): Multimedia and graphics software
http://biz.yahoo.com/p/a/atvi.html
After Hours: $19.46
STATUS: Breakout test. We closed a position on ATVI Wednesday as it moved through the 10 day EMA (19.95), looking for it to find a bottom on the pullback where we could then consider another play. Thursday and Friday ATVI tapped at and tested the 18 day EMA (19.58) on the lows, closing at that key near term support Friday. Volume rose Thursday and was still higher Friday than on the prior selling sessions; that shows us some interest in the stock as it tests and holds this near support. The 18 day EMA should be the support for a strong stock making a test of its breakout. That is what ATVI is doing, testing the late July breakout from its 6 month cup with handle base. The breakout took the stock to a new all-time high, and this tests appears to be setting it up for the resumption of that move. Looking for that volume to continue to build as ATVI moves up and off the 18 day EMA and through the 10 day EMA to give us the entry point.
Volume: 1.937M Avg Volume: 2.382M
BUY POINT: $20.05 Volume=2.8M Target=$23.45 Stop=$19.42
POSITION: AQV AD - Jan. $20c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/atvi.html
New Downside Play:
Play Date: 08/13/2005
GMR (General Maritime--$36.10; -0.58; optionable): Shipping
http://biz.yahoo.com/p/g/gmr.html
STATUS: Put. The shippers were the early movers when the market recovered, and now they are suffering as the Fed is over a year into rate hikes and oil is near $70/bbl. Another indicator that suggests the Fed needs to get off the brakes as opposed to looking for surging growth in the future. In any event, GMR has sold down the 10 day EMA (37.50) and after a lateral move last week started to sell again on Friday. It has reached the January 2005 low that set off a 12 point rally, but this time it does not look to have the same result in mind. Money flow is leading lower and we are looking for GMR to continue the move and follow it down. A move to the target lands us a 45%ish gain.
Volume: 634.4K Avg Volume: 818.788K
BUY POINT: $35.99 Volume=815K Target=$34 Stop=$36.42
POSITION: GMR UG - Sept. $35p (-38 delta)
http://www.investmenthouse.com/cs/gmr.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 of the potential splits plays 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.
ANSI: Researching to pinpoint the date.
APA: Forecast 9-9-05.
APPX: Forecast 8-12-05. No word on an announcement Friday at the board meeting.
CDIS: No split announcement 8-2-05 with its earnings. Letting it work for us as we ascertain the date it will announce.
CELL: Announced its split Friday after the close. Will look for a rebound off of the 18 day EMA to give us an entry to start a pre-split position.
CHTT: Forecast 9-19-05 after the close. Struggling. Fell through the 50 day EMA Friday.
CWTR: Researching to pinpoint the date. Split in March so this is a bit of a wildcard.
DNA: Researching next split date.
HOC: Forecast mid-August. Have been unable to pinpoint the board meeting date. Made the break higher from the lateral range Wednesday.
IEX: Researching to pinpoint date.
LM: Did not announce on 7-21-05 but a strong stock. Researching the next date.
MRVL: Forecast to announce 8-18-05 after the close. Looking very good as volume jumps on a move off the 18 day EMA.
NX: Forecast 8-25-05
PLCE: Forecast 8-18-05
POOL: Forecast 8-12-05. Left us at the altar Friday, but we will just let it make this 50 day EMA lateral consolidation and see if it gives us a strong upside move we can get into.
TSCO: Researching the next date.
VLO: Researching to pinpoint the date.
WC: No announcement 8-3-05 and researching next date.
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: 08/13/2005
CETV (Central European Media--$50.78; +0.1; optionable): Central and eastern European television stations. Forecast to announce a split in mid-October
BACKGROUND: Last announced a 2:1 split 10-14-03 at $28.07. It has two earlier splits under its belt at a similar price.
http://biz.yahoo.com/p/c/cetv.html
STATUS: Cup w/handle. We may be a bit early with a split forecast way out in October, but this pattern is one we were not going to let go without a comment and a position if it makes the break higher. A nice 22 week pattern that formed mostly using the 50 day EMA (48.04) as support. Accumulation is an outstanding 7 to 3 (7 up price weeks on rising volume to 3 down price weeks on rising volume), showing plenty of buying as CETV moved along the 50 day in this lateral consolidation. Excellent money flow is leading higher as well. Volume has kicked up on a few occasions the past two weeks as CETV formed the handle, and it was up above average Friday as well. That is telling us to get ready for the breakout to come.
Volume: 233.425K Avg Volume: 151.668K
BUY POINT: $51.28 Volume=250K Target=$58.95 Stop=$49.76
POSITION: EVU AJ - Jan. $50c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/cetv.html
Play Date: 08/13/2005
DE (Deere & Co.--$72.6; -0.29; optionable): Nothing runs like a Deer. A wildcard forecast to announce a split 8-16-05 before the open.
BACKGROUND: DE has no splits in its history, but we have word the board is considering one given the price and given that others in the sector have announced.
http://biz.yahoo.com/p/d/de.html
STATUS: Cup w/handle. Nice handle has formed the past three weeks, using the 18 day EMA (71.62) as support. This looks to be the finishing touches to an 8 month pattern forming just below an all-time high. This potential announcement is in conjunction with earnings. If it gives us a breakout move ahead of the announcement we will look at opening some positions. Otherwise this is one we want to see announce and give us the breakout move.
Volume: 1.048M Avg Volume: 1.776M
BUY POINT: $73.65 Volume=2.7M Target=$82 Stop=$71.55
POSITION: DE LN - Dec. $70c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/de.html
Play Date: 08/13/2005
LOW (Lowes--$65.19; +0.24; optionable): Home improvement stores. Forecast 8-15-05.
BACKGROUND: Last announced a 2 for 1 split on 5-25-01 at a price of $71.
http://biz.yahoo.com/p/l/low.html
After Hours: $65.19
STATUS: Breakout test. LOW broke out from an 8 month base in early July, rallying to 67 on the initial move. It came back to test the 50 day EMA (62.05) the first week of August and then rebounded on strong trade Tuesday and Wednesday. It has tested back Thursday and Friday, holding the 18 day EMA (64.44) as it does. Money flow is moving higher ahead of the stock even as it makes this pullback. Good volume Friday as LOW moved up in a weak market. Looking to move in on a solid break higher on continued rising volume.
Volume: 3.988M Avg Volume: 3.584M
BUY POINT: $66.21 Volume=4M Target=$74.48 Stop=$64.32
POSITION: LOW AM - Jan. $65c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/low.html
Play Date: 08/13/2005
TECH (Techne--$49.09; -0.41; optionable): Biotechnology. Forecast to potentially announce a split 8-16-05 before the open in conjunction with earnings.
BACKGROUND: Last announced a 2:1 split on 11-9-200 at $105. The one we are focusing on is the prior one, a 2:1 split announced 10-23-97 at $40. After the tech boom stocks are announcing at more sane levels.
http://biz.yahoo.com/p/t/tech.html
STATUS: Double bottom w/handle. TECH is approaching a new 4.5 year high, forming a short 5 week pattern over the 50 day EMA (47.35). This consolidation follows an early May breakout from a 14 month base. This is its second test of the 50 day EMA since the breakout, and it is setting up nicely for the next run higher. The announcement Tuesday could provide the catalyst for the breakout to the next run higher. Good accumulation and solid money flow. Just looking for TECH to give us the move to enter upon.
Volume: 179.733K Avg Volume: 308.763K
BUY POINT: $49.92 Volume=365K Target=$56.95 Stop=$48.52
POSITION: TGQ AJ - Jan. $50c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/tech.html
Continuing Pre-Announcement Plays:
Play Date: 08/09/2005
ANSI (Advanced Neuromo--$49.29; -0.89; optionable): Medical instruments. Researching next date.
BACKGROUND: Last announced a 3:2 split on 6-6-03 at $48.90.
http://biz.yahoo.com/p/a/ansi.html
STATUS: Breakout test. A modest, low volume pullback Friday as ANSI traded below the 10 day EMA (49.00) and then rebounded to hold that level on the close. ANSI has made the pullback to test 49 as we wanted. Given the market this was not bad action and may have been enough to shake out the last sellers on this pullback. To recap: ANSI exploded higher in late July on a superb earnings report, rallying over 10 points on that move. Great breakout from a 6 month cup with handle base sporting excellent 8 to 3 accumulation (8 up price weeks on rising volume to 3 down price weeks on rising volume). That shows a lot of buying that set up the breakout and the run higher. Very good test back on low volume, holding near the 10 day EMA.
Volume: 337.748K Avg Volume: 431.752K
BUY POINT: $49.75 Volume=600K Target=$59.65 Stop=$48.18
POSITION: UAI KJ - Nov. $50c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/ansi.html
CONTINUING PRE-SPLIT PLAYS:
Play Date: 08/11/2005
THQI (THQ, Inc.--$35.22; -0.43; optionable): Multimedia and graphics software. Splits 3:2 on 9-2-05
http://biz.yahoo.com/p/t/thqi.html
STATUS: Test 18 day EMA. Modest pullback on lower, below average volume Friday as the market sold, but managed to easily hold above the 10 day EMA (34.92) as it did. Still in solid shape to mount a nice pre-split run for us. To recap: After a strong move out of a 16 week base in early July, THQI rallied to 36.50 and then gapped back down. It managed to hold the 18 day EMA (34.44) and moved laterally the past week on lower volume. Thursday THQI bounced higher off of that near support on rising, above average volume. Strong money flow. Looking good for a pre-split run here from this market leader.
Volume: 641.968K Avg Volume: 736.846K
BUY POINT: $35.88 Volume=1M Target=$40.35 Stop=$34.22
POSITION: QHI LE - Dec. $35c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/thqi.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 08/04/2005
ADSK (Autodesk--$36.83; +0.14; optionable): CAD programs
http://biz.yahoo.com/p/a/adsk.html
After Hours: $36.74
STATUS: Double bottom w/handle. Started showing some life Friday in a weak market, moving higher on some rising volume that came close to average. It is still working on the handle to its pattern and is getting ready to give us the next breakout. Remaining patient but looks ready to make the break higher. To recap: Split in December 2004, set up a 5 month cup with handle, made the breakout, but then stalled and fell into the current 9 week pattern. Nice base on base pattern; these form one after the other and work to really shake out the sellers. It has formed a nice handle now, even better for the shakeout of the last sellers. Positive 3 to 2 accumulation in the pattern (3 up price weeks on rising volume to 2 down price weeks on rising volume) shows net buying.
Volume: 2.323M Avg Volume: 2.586M
BUY POINT: $36.88 Volume=2.7M Target=$42.38 Stop=$35.65
POSITION: ADQ AG - Jan. $35c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/adsk.html
Play Date: 08/10/2005
GPRO (Gen Probe--$46.81; -0.15; optionable): Medical equipment (probe-based products for diagnosis of diseases.
http://biz.yahoo.com/p/g/gpro.html
After Hours: $46.9
STATUS: Cup w/handle. Another nice doji at the 10 day EMA (46.34) Friday on very low, below average volume as GPRO continues to form the handle in preparation for the break higher. Just being patient and letting it set up and then show us the breakout move. To recap: After disappointing earnings in early May gapped GPRO lower and started the current 14 week base. It gapped higher to start the month as it reported better than expected earnings; ah the earnings game. Positive 3 to 2 accumulation (3 up price weeks on rising volume to 2 down price weeks on rising volume) shows net buyers and that is all it takes to support a breakout move. It has come back to fill most of that early August gap higher, showing a doji on the 10 day EMA the past three sessions. Going to let it show us the move on strong volume to enter. With the market a bit equivocal, the healthcare sector is more defensive and a good place to look.
Volume: 205.001K Avg Volume: 699.205K
BUY POINT: $47.12 Volume=1.1M Target=$54 Stop=$45.95
POSITION: PSU KI - Nov. $45c (60 delta) &/or Stock
http://www.investmenthouse.com/cs/gpro.html
Play Date: 08/04/2005
HRS (Harris Corp.--$36.60; +0.17; optionable): Telecom equipment
http://biz.yahoo.com/p/h/hrs.html
STATUS: Breakout test. Volume crept higher but was still below average Friday as HRS edged higher in this test that has held above the 10 day EMA (35.82). Good relative strength for a weak market. Ready to make the move and just needs to show us the action. To recap: HRS reported some strong results to end July and gapped sharply higher on excellent trade. That move took it out of a 19 week double bottom with handle base. The move took HRS to a new all-time high just over 37. It has come back the past 4 sessions to test the move, holding easily above the 10 day EMA, moving lower on lower volume.
Volume: 720.6K Avg Volume: 850.868K
BUY POINT: New: $36.65 (orig. $35.95) Volume=1M Target=$41.65 Stop=$35.55
POSITION: HRS KG - Nov. $35c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/hrs.html
Play Date: 08/06/2005
SYK (Stryker--$52.51; +0.17; optionable): Medical instruments
http://biz.yahoo.com/p/s/syk.html
STATUS: Breakout test. Still in the nice test, holding above the 18 day EMA (52.21) on low, below average volume in a market that was selling to end the week. SYK just went about its own business, something a strong stock will do. Set up nicely for the break higher to continue the breakout move. To recap: SYK shot higher in mid-August on good earnings, breaking out from its 22 week base sporting positive 6 to 5 accumulation (6 up price weeks on rising volume to 5 down price weeks on rising volume). That shows us net buying in the consolidation, giving it the base to support a good breakout and run. Money flow is solid as well even as the stock makes this pullback. Like the first breakout test; when the stock moves up off the test on strong volume that shows us that buyers are moving back into the stock after the short term profit takers get out.
Volume: 757.7K Avg Volume: 1.367M
BUY POINT: $53.05 Volume=2M Target=$59.89 Stop=$52.05
POSITION: SYK LJ - Dec. $50c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/syk.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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