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Begin part 3 of 3
THE PLAYS
Good movers: BER; CERN; GPN; IRIS; SNDK; UNH; WIRE
New Pre-Split Play:
Play Date: 10/15/2005
SBUX (Starbucks--$52.88; -0.02; optionable): Fancy, high-priced coffees. Splits 2:1 on 10-24-05
http://biz.yahoo.com/p/s/sbux.html
After Hours: $52.88
STATUS: Test 200 day SMA. SBUX moved through the 200 day SMA (51.93), part of its continuing work on a 10 month base that started when SBUX started to report declining earnings. This month it has started to report upside surprises in earnings. It tested the 200 day tow weeks back and eased back as the market sold. It blasted through that level Thursday on strong volume and took a breather Friday. Showing a solid return to buying interest with money flow continuing to strengthen. Has some good momentum and a split coming. Looking for SBUX to continue to percolate higher this week.
Volume: 3.512M Avg Volume: 3.054M
BUY POINT: $52.25 Volume=3.2M Target=$58.88 Stop=$51.78
POSITION: SQX AJ - Jan. $50c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/sbux.html
New Post-Split Play:
Play Date: 10/15/2005
CRDN (Ceradyne--$37.70; +1.20; optionable): Ceramic products for defense, industrial, auto, etc. applications
http://biz.yahoo.com/p/c/crdn.html
After Hours: $37.70
STATUS: Test breakout. During the recent October selling CRDN showed its strength with a lateral move over the 18 day EMA (36.26) as it tested the late September breakout from a nicely formed 9 month base. Solid 10 to 7 accumulation shows net buying setting up the breakout move. Strong surge on strong volume provided the breakout, following the rising money flow. Relative strength broke out as well, a good corroboration of the price move. A market leader in both technical position and fundamentals. Ready for a breakout to a new all-time high as CRDN continues its breakout move. Friday it was up on a return to above average volume. Looks strong.
Volume: 623.592K Avg Volume: 557.167K
BUY POINT: $38.12 Volume=800K Target=$44.95 Stop=$36.22
POSITION: AUE CG - Mar. $35c (65 delta) or AUE CH - Mar. $40c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/crdn.html
New Leader Play:
Play Date: 10/15/2005
AVL (Aviall--$35.50; +0.19; optionable): After market supply chain management services for aerospace, defense and marine industries
http://biz.yahoo.com/p/a/avl.html
STATUS: Cup w/handle. AVL is another market leader sporting some of the best fundamental and technical numbers in the market. In the recent October selling AVL bounced higher and then spent last week forming the handle, the lateral low volume shakeout, to the 10 week pattern. Formed over the 50 day EMA (33.86), an important institutional support level. Excellent 4 to 1 accumulation (4 up price weeks on rising volume to 1 down price weeks on rising volume) shows plenty of buying, and money flow is strong as well. Good volume Friday as it gapped higher toward the breakout. Looks super and ready for a new all-time high.
Volume: 260.7K Avg Volume: 191.02K
BUY POINT: $36.22 Volume=287K Target=$42.55 Stop=$34.77
POSITION: AVL CG - Mar. $35c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/avl.html
Play Date: 10/15/2005
INGR (Intergraph--$45.46; +0.10; optionable): Computer graphics software for commercial and government sectors
http://biz.yahoo.com/p/i/ingr.html
STATUS: Flying plateau. A strong year for INGR. After the run higher it needed a breather and has been working laterally the past 6 weeks, using the 18 day EMA (44.49) as support. Indeed, it has formed something of a mini double bottom with handle as it holds its gains even in the October selling. A strong leadership stock with topflight fundamental credentials to go along with its pattern. Friday INGR hit a new high but could not hold it into the close. Still looking good in its lateral move and has the ability to deliver us a nice gain even from this short pattern. Again, its ability to hold during the selling was impressive, sending relative strength to a breakout ahead of the price. Looking for price to follow.
Volume: 455.004K Avg Volume: 290.203K
BUY POINT: $46.31 Volume=435K Target=$53.55 Stop=$44.74
POSITION: IGQ AI - Jan. $45c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/ingr.html
New downside play:
Play Date: 10/15/2005
CX (Cemex SA--$47.58; -0.91; optionable): Cement
http://biz.yahoo.com/p/c/cx.html
STATUS: Double top. CX double topped in early October, making the second top after the early September storm higher. The second top had no volume. CX thudded down to the 50 day EMA (49.05) bounced in an attempt to recover, but then breached that support Thursday. Friday it tried the 50 day but then turned over and fell on strong volume; not good action as the market was rallying. Looking for a continued move lower to enter. Looking for a 40%ish gain on the move to the target. Like the play because it can give us this gain without even having to hit the late August low at 44.
Volume: 3.485M Avg Volume: 1.708M
BUY POINT: $47.42 Volume=1.8M Target=$45.38 Stop=$48.32
POSITION: CX WJ - Nov. $50p (-73 delta)
http://www.investmenthouse.com/cs/cx.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.
AGN: Forecast 10-26-05. No current play. Trying to hold support at 87.50, but a very toppish pattern.
AME: Forecast 10-20-05 before the open.
APC: Forecast 10-27-05 before the open. No current play. Held some support at 85 and bouncing Friday. Will have to clear 90 - 91 to show new life.
ATW: Forecast 10-27-05. No current play. Trying to rebound off 70 support, but still in a near term downtrend.
BRO: Forecast 10-17-05 after the close.
CERN: Forecast 10-20-05
CLF: Forecast 11-8-05. No current play. Retaking the 50 day EMA on improving volume. Has to clear 80.
DVN: Forecast 11-2-05 before the open. Recovered the 50 day EMA Friday after the Thursday dive lower after holding up so well.
GD: Forecast 10-19-05 before the open
GENZ: Forecast 10-18-05 before the open. Looking for a move through 70.55 to initiate a play on Monday.
GG: Forecast 11-7-05.
GYI: Forecast 10-20-05. No current play. Steady decline to fill the late July gap. That is what it looks like it is going to do.
HAR: Forecast 10-19-05 after the close.
IMDC: Forecast 11-7-05. Still trying to hold up below the 50 day EMA.
ISRG: Forecast 10-25-05. Held some support at 65 but threatening to fill the big July gap higher.
KMG: Forecast 10-26-05. No current play. Continues to struggle, gapping lower Thursday though looks as if it will try to test he 50 day EMA as stocks recover.
LM: Forecast 10-25-05 before the open. No current play. Rebounding to test the 50 day EMA on low volume.
MRVL: Forecast 11-17-05 after the close
RL: 11-4-05 before the open
RS: Forecast 10-20-05.
SIE: Forecast 10-24-05 after the close
SWN: Forecast 10-27-05 before the open.
UPL: Forecast 10-25-05 after the close.
WFMI: Forecast early November. Has held 125 again and now testing the 50 day EMA.
WFT: Forecast 10-27-05. No current play. Has tested the 200 day SMA and starting a rebound attempt.
New Pre-Announcement Plays: New write up
Play Date: 10/15/2005
SLB (Schlumberger--$82.81; +3.52; optionable): Oil and gas equipment and services. Forecast to announce a stock split 10-20-05.
BACKGROUND: No splits in SLB's history.
http://biz.yahoo.com/p/s/slb.html
After Hours: $82.70
STATUS: Recovering 50 day EMA. SLB ran into trouble in the early October selling when energy stocks were torched, but it held some support at 78, filling the gap higher from late July. It formed a little double bottom the past two weeks and surged Friday on stronger, above average volume, retaking the 50 day EMA (82.07). We expect oil services companies to continue to perform better than the overall energy market because their earnings are not going to be impacted by the storms much because they are not losing production; they are the ones fixing the lost production facilities. Thus we are looking to move into SLB as it continues higher and clears the 50 day SMA (83.38).
Volume: 6.98M Avg Volume: 4.651M
BUY POINT: $83.48 Volume=7M Target=$95.95 Stop=$81.55
POSITION: SLB AP - Jan. $80c (63 delta) &/or Stock
http://www.investmenthouse.com/cs/slb.html
Continuing Pre-Announcement Plays:
Play Date: 10/11/2005
AME (Ametek--$42.91; +0.65; optionable): Industrial electrical equipment. Forecast October 20 before the open
BACKGROUND: Last announced a 2:1 split on 1-28-04 at $50.20.
http://biz.yahoo.com/p/a/ame.html
STATUS: Breakout test. AME ended last week testing and holding the 18 day EMA (42.34) on lower, below average volume. It is setting up the continuation of its strong late September breakout, and this pullback is shaking out the sellers and setting up the continued breakout run. To recap: AME blasted higher in late August and early September, moving out of a 12 week double bottom with handle base. Solid pattern that formed using the 200 day SMA (39.43) as support for the two legs. Nice run in 2003 and 2004, needing a breather to consolidate the move. A 16 week base from March to June could not yield a strong breakout. It then fell into the current base, sporting solid 3:1 accumulation (3 up price weeks on rising volume to 1 down price weeks on rising volume) and strong money flow. Nice price breakout and relative strength moved with it, showing us AME's strength in a down market. It used the recent selling as a test of its breakout; like it when a stock shows strength even in overall market weakness.
Volume: 266.5K Avg Volume: 315.332K
BUY POINT: $43.65 Volume=475K Target=$50.32 Stop=$42.05
POSITION: AME CH - Mar. $40c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/ame.html
Play Date: 10/08/2005
RL (Ralph Lauren--$50.74; +1.48; optionable): Apparel. Forecast 11-4-05 before the market open.
BACKGROUND: No splits in Ralph's history (at least with his stock), but it is at a level where clothing makers tend to split and we have heard that the board is pleased with the stock performance and want more.
http://biz.yahoo.com/p/r/rl.html
STATUS: Double bottom w/handle. Got in trouble last week, falling below the 50 day EMA (49.48) on the Thursday close. That was a bit more of a shakeout in the handle than we wanted, particularly after RL tried the breakout two Fridays back. It rebounded Friday on even stronger volume, however, retaking the 50 day and moving back into the original handle. Not bad action at all, and want to see volume continue its strength as the stock moves higher and through the breakout point. To recap: Nice 8 week base sporting outstanding 4 to 0 accumulation has set the stage for the next breakout to a new all-time high. A market leader, retail sector or not, and it is showing excellent attributes. Money flow is surging, a good corroboration of the money flow. Relative strength is strong.
Volume: 1.121M Avg Volume: 858.618K
BUY POINT: $52.78 Volume=1.1M Target=$60.95 Stop=$50.44
POSITION: RL AJ - Jan. $50c (67 delta) &/or Stock
http://www.investmenthouse.com/cs/rl.html
Play Date: 10/11/2005
SWN (Southwestern Energy--$68.13; +2.37; optionable): Independent oil and gas. Forecast to announce a split 10-27-05 after the close
BACKGROUND: Last announced a 2:1 split on 5-11-05 at $67.50.
http://biz.yahoo.com/p/s/swn.html
After Hours: $69
STATUS: Test 50 day EMA. We were looking for SWN to hold the 18 day EMA (68.81) but it went ahead to tap the 50 day EMA (62.86) on the Thursday and Friday intraday lows. Good price rebound Friday on some solid above average volume. A strong move through 79 opens the door. To recap: Strong mover in late 2004 and all of 2005. SWN broke out in May and rallied up the 18 day EMA and then came back to test the 50 day EMA in August after that run; typical action. Broke higher again in September and shot over 80. It then got caught in the selling but did not roll over. Unlike many of the energy stocks it has held the near support. Showing relative strength most of the energy sector is not showing. Looking for a break over the 10 day EMA on stronger volume to start the play.
Volume: 3.297M Avg Volume: 1.959M
BUY POINT: New: $70.11 (orig. $71.78) Volume=2.8M Target=$85.95 Stop=$69.12
POSITION: SWN CN - Mar. $70c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/swn.html
PRE-SPLIT PLAYS:
Play Date: 10/08/2005
CVH (Coventry Health Care--$86.32; +1.6; optionable): Health care plans. Splits 3:2 on 10-18-05.
http://biz.yahoo.com/p/c/cvh.html
STATUS: CVH continues to work higher up the 18 day EMA (84.81) in a very narrow range. Volume bumped higher Wednesday and Thursday as CVH tested that level and held. Looks primed for a move higher into its split this week.
Volume: 815.7K Avg Volume: 1.254M
BUY POINT: $86.65 Volume=1.2M Target=$97.55 Stop=$84.05
POSITION: CVH AQ - Jan. $85c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/cvh.html
POST SPLIT PLAYS:
Play Date: 10/10/2005
CHS (Chicos Fas--$37.73; +0.9; optionable): Apparel stores
http://biz.yahoo.com/p/c/chs.html
After Hours: $37.94
STATUS: Double bottom w/handle. Good test of the 50 day EMA (36.04) on the handle last week and then a rebound Friday, gapping higher. Now volume with the move. Will need to see that as CHS continues higher and shows us the breakout. To recap: Nice, classic handle is forming to a 9 week double bottom. Used the 200 day SMA (31.73) on the right leg as support, undercutting the left leg from the August low. Positive 4:3 accumulation (4 up price weeks on rising volume to 3 down price weeks on rising volume) shows net buyers. Quiet pattern, ignored by the market. It is quietly setting up for a breakout to a new all-time high. Perennial leader that has set up for the next move.
Volume: 991K Avg Volume: 1.906M
BUY POINT: $38.75 Volume=2.9M Target=$46.45 Stop=$36.88
POSITION: CHS BG - Feb. $35c (67 delta) &/or Stock
http://www.investmenthouse.com/cs/chs.html
Play Date: 10/13/2005
ESRX (Express Scripts--$61.16; +1.01; optionable): Mail order prescriptions
http://biz.yahoo.com/p/e/esrx.html
After Hours: $60.62
STATUS: Test 50 day EMA. Rallied to the 10 day EMA (61.18) Friday but volume fell back below average on the move. If it can show us some stronger volume again it will be a buy. To recap: Has tested the 50 day EMA (58.61) after its rally in August through the first of October following the late July breakout move. Money flow remains strong. Want to see it break back through the 10 day EMA (61.18) on continued volume as ESRX continues back up and off the 50 day.
Volume: 1.266M Avg Volume: 1.383M
BUY POINT: $61.25 Volume=2.1M Target=$70.55 Stop=$58.45
POSITION: XTQ AL - Jan. $60c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/esrx.html
Play Date: 10/06/2005
FLO (Flowers Foods--$27.79; +0.79; optionable): Bakery products in the US
http://biz.yahoo.com/p/f/flo.html
STATUS: Cup w/handle. Moving well Friday but no volume with it. Closing in on the breakout, and we anticipate volume to come back in as it was solid to start the week when FLO was testing the breakout. To recap: FLO continues its solid work preparing for a breakout from its short 8 week pattern that formed over the 50 day EMA (26.10). Split in early July and continued the run into mid-August before needing this breather. Strong 3 to 1 accumulation shows plenty of buying. Strong money flow as well is surging higher. Relative strength broke out Thursday ahead of the price and continued higher Friday, a bullish indication that the stock will follow.
Volume: 191.9K Avg Volume: 231.386K
BUY POINT: $27.88 Volume=339K Target=$31.98 Stop=$26.41
POSITION: FWW AW - Jan. $26.625c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/flo.html
Play Date: 10/12/2005
GTK (Gtech Holdings--$31.62; +0.17; optionable): Lottery management, equipment
http://biz.yahoo.com/p/g/gtk.html
STATUS: Test breakout. Still in the test of the 50 day EMA (31.15) after filling the early September gap higher. Volume was strong Tuesday and Wednesday, and it looked as if GTK was ready to roll. Trade faded to end the week but the pattern holds and GTK is still set to make the next break higher. To recap: Strong breakout in early September from a 17 month double bottom with handle base, gapping higher on strong trade. It shot its wad on the breakout move, spending the next 4 weeks falling back to the 50 day EMA and filling the gap on lower volume. Money flow remains strong and relative strength is excellent.
Volume: 874.1K Avg Volume: 1.174M
BUY POINT: $32.05 Volume=1.7M Target=$37.95 Stop=$30.71
POSITION: GTK AZ - Jan. $32.50c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/gtk.html
Play Date: 10/11/2005
PCP (Precision Castparts--$50.82; +2.37; optionable): Steel and iron
http://biz.yahoo.com/p/p/pcp.html
STATUS: Test 50 day EMA. Volume jumped back above average Friday as PCP posted a strong move off of its 50 day EMA (48.52) test. Looks ready to continue higher after that very nice, low volume test made during the high volume market selling. That is acting like a leader. To recap: Broke out from a 4.5 month base in mid-July, gapping higher on strong volume. It then rallied higher up the 18 day EMA (50.28) as a strong stock will. It used the recent market selling to come back to the 50 day EMA on low volume, also what a strong stock does. Volume then jumped back up on Tuesday as it tapped at the 50 day on the low and rebounded for a nice gain. Those are all attributes of a stock ready to move higher. Want to see solid trade continue as PCP continues the rebound move to start the next leg.
Volume: 1.153M Avg Volume: 907.959K
BUY POINT: $51.12 Volume=1.2M Target=$58.75 Stop=$48.22
POSITION: PCP CJ - Mar. $50c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/pcp.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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