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Begin part 3 of 3
THE PLAYS
Good movers: ACL; CERN; GSF; IWM; RTH
New Pre-Split Play:
Play Date: 10/18/2005
ATVI (Activision--$20.73; +0.25; optionable): Multimedia and graphics software for games. Splits 4:3 on 10/25/05
http://biz.yahoo.com/p/a/atvi.html
After Hours: $20.75
STATUS: Double bottom w/handle. Neat little 6 week base has set up, testing the late July breakout and run higher from its 23 week cup with handle. Solid trade as it bounced higher last week and then backing off as it moved laterally Monday and Tuesday, forming the handle to the base. May take another session or two of lateral movement, but when we see it break higher on a shot of above average volume we will be ready to enter the play.
Volume: 1.651M Avg Volume: 2.288M
BUY POINT: $21.05 Volume=3.4M Target=$25.25 Stop=$19.92
POSITION: AQV AD - Jan. $20c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/atvi.html
New downside play:
Play Date: 10/18/2005
COP (ConocoPhillips--$60.08; -2.94; optionable): Big oil
http://biz.yahoo.com/p/c/cop.html
After Hours: $60.08
STATUS: Head and shoulders. Volume is surging as COP moves toward the neckline and the breakdown from its 12 week bearish base. Money flow is diving lower ahead of price, and that surging volume indicates it is ready to make the breakdown. Major oil is struggling, and a move to the target lands us a 45%ish gain.
Volume: 9.45M Avg Volume: 6.434M
BUY POINT: $59.92 Volume=7M Target=$56.89 Stop=$60.45
POSITION: COP WL - Nov. $60p (-43 delta)
http://www.investmenthouse.com/cs/cop.html
Play Date: 10/18/2005
DVN (Devon Energy--$59.3; -3.7; optionable): Not so big oil
http://biz.yahoo.com/p/d/dvn.html
STATUS: Head and shoulders. This is one of our pre-announcement plays that is in a dive. DVN is another energy stock diving lower on very strong volume. It is making the breakdown from its 6 week bearish base, following money flow that has turned down and is diving lower ahead of price. We are looking for the breakdown to take it to the mid-August low at 55, but the height of the pattern suggests it could go a bit lower. A move to our target lands us a 40%ish gain.
Volume: 4.635M Avg Volume: 3M
BUY POINT: $58.97 Volume=3M Target=$55.95 Stop=$60.55
POSITION: DVN WL - Nov. $60p (-49 delta)
http://www.investmenthouse.com/cs/dvn.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. Rallying up to the 18 day EMA but no volume yet. Without volume not likely to break back through but will continue forming the new base. Not a great entry point here.
AME: Forecast 10-20-05 before the open.
APC: Forecast 10-27-05 before the open. No current play. Ready to head back down to at least test 85 again. Much too choppy and under distribution; not a safe entry point.
ATW: Forecast 10-27-05. No current play. Diving lower on rising volume. Definitely not a play to enter here.
BRO: Forecast 10-17-05 after the close. Dove lower on the earnings but recovered nicely.
CERN: Forecast 10-20-05. Looking good.
CLF: Forecast 11-8-05. No current play. Still needs to clear 80.
DVN: Forecast 11-2-05 before the open. See above under Downside plays. Trying to take some of what it is offering to the downside. Maybe after that it will set back up before November.
GD: Forecast 10-19-05 before the open. Looking pretty.
GENZ: Forecast 10-18-05 before the open. Jumped on the earnings but could not hold the move. Still a decent pattern setting up and we will keep watching it for an entry point.
GG: Forecast 11-7-05. No current play. Still working at the 50 day EMA, trying to hold and set back up.
GYI: Forecast 10-20-05. No current play. Rebounded to the 10 day EMA on low volume. Not in position to enter.
HAR: Forecast 10-19-05 after the close.
IMDC: Forecast 11-7-05
ISRG: Forecast 10-25-05
KMG: Forecast 10-26-05. No current play. Not to be left out, KMG is diving lower on rising volume.
LM: Forecast 10-25-05 before the open. No current play. Still struggling, trying to hold 100.
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
SLB: Forecast 10-20-05. Did we say upside? Turning down from the 50 day EMA on even stronger volume.
SWN: Forecast 10-27-05 before the open.
UPL: Forecast 10-25-05 after the close.
WFMI: Forecast early November.
WFT: Forecast 10-27-05. No current play. So much for the rebound attempt. Back to the 200 day SMA.
New Pre-Announcement Plays: New write up
Play Date: 10/18/2005
PGR (Progressive--$107.91; -1.29; optionable): Property and casualty insurance. Forecast 11-9-05 after the close.
BACKGROUND: Last announced a 3:1 split 3-19-02 at $160. Before that a 3:1 split 11-10-92 at $150. May wait until $150 to announce, but it can pop off a 2:1 here and still have the same post split price. Plus it is a great test of the breakout.
http://biz.yahoo.com/p/p/pgr.html
STATUS: Test breakout. Strong move higher in September and then again last week, breaking higher on very strong volume. Success makes you a target, and PGR was downgraded Monday. All that has done is push PGR back to the 10 day EMA (107.28) on lower volume, testing the strong break higher. Looking for a rebound on rising trade to start the play. Using options to get better leverage on our gain.
Volume: 1.118M Avg Volume: 813.918K
BUY POINT: $108.95 Volume=1.2M Target=$117 Stop=$106.95
POSITION: PGR BB - Feb. $110c (50 delta)
http://www.investmenthouse.com/cs/pgr.html
Play Date: 10/18/2005
TECH (Techne--$55.46; +0.08; optionable): Biotechnology. Forecast for a possible split announcement 10-27-05 before the open.
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: Test 50 day EMA. TECH surged in August, taking it to 58 on the move. It ahs spent the past 5 weeks moving laterally and back to the 50 day EMA (54.30) to test the move and take a breather. Strong leader with money flow holding up well. May take a bit more time to set up but solid and just needs some volume as it makes the break higher from the 50 day.
Volume: 159.247K Avg Volume: 340.088K
BUY POINT: $56.21 Volume=510K Target=$63.95 Stop=$54.65
POSITION: TGQ AK - Jan. $55c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/tech.html
Continuing Pre-Announcement Plays:
Play Date: 10/11/2005
AME (Ametek--$42.84; -0.27; 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. Still working on the test, tapping the 18 day EMA (42.46) on the low and rebounding to hold the 10 day EMA on the close. Still waiting for the break higher from here. Super relative strength. 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 (39.50) 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: 311.2K Avg Volume: 312.194K
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--$50.87; -0.21; 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. Very low volume once again as RL holds the 10 day EMA (50.70). Nice pause here, holding its gains as the market sells off. Just waiting for the volume to return as it makes the breakout move. 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: 421.3K Avg Volume: 860.628K
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: 10/04/2005
SIE (Sierra Health Services--$70.58; -0.09; optionable): Health care plans. Health care plans. Forecast to announce a split on 10-24-05 after the close
BACKGROUND: Last announced a 3 for 2 split in May 1998 near $40.
http://biz.yahoo.com/p/s/sie.html
STATUS: Double bottom w/handle. Still working on the handle to its 14 week base, working laterally over the 50 day EMA (68.36) on low, below average volume. It is one that is testing our patience, but the pattern continues to hold during all the selling.
Volume: 167.4K Avg Volume: 405.489K
BUY POINT: $71.21 Volume=635K Target=$83.25 Stop=$68.29
POSITION: SIE CN - Mar. $70c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/sie.html
PRE-SPLIT PLAYS:
Play Date: 10/15/2005
SBUX (Starbucks--$52.60; -0.49; optionable): Fancy, high-priced coffees. Splits 2:1 on 10-24-05
http://biz.yahoo.com/p/s/sbux.html
After Hours: $52.70
STATUS: Test 200 day SMA. Still working on the handle or the lateral move above the 200 day SMA (51.84) on below average volume. Nice rest after the move through the 200 day, holding up as the market sells. Once this round is over it will be ready to break higher. To recap: SBUX moved through the 200 day SMA, 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 two 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: 2.091M Avg Volume: 3.055M
BUY POINT: New: $52.78 (orig. $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
POST SPLIT PLAYS:
Play Date: 10/10/2005
CHS (Chicos Fas--$37.19; +0.16; optionable): Apparel stores
http://biz.yahoo.com/p/c/chs.html
STATUS: Double bottom w/handle. Still working laterally above the 18 day EMA (36.67) on below average volume, showing a nice tight doji Tuesday. Nice handle forming and just needs a better market to make the breakout. To recap: Nice, classic handle is forming to a 9 week double bottom. Used the 200 day SMA (31.88) 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: 940.9K Avg Volume: 1.924M
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: 10/15/2005
CRDN (Ceradyne--$38.46; +0.27; optionable): Ceramic products for defense, industrial, auto, etc. applications
http://biz.yahoo.com/p/c/crdn.html
STATUS: Test breakout. Volume move to average Monday, making a good showing as CRDN started to resume the breakout move. Not the breakaway move we wanted to see, closing well off the intraday high (39.05). Still a solid leader ready to move. To recap: During the recent October selling CRDN showed its strength with a lateral move over the 18 day EMA (36.67) 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: 547.05K Avg Volume: 552.989K
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
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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