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us stock market, stock watch
Begin Part 2 of 4
THE PLAYS: KRON announced its split, one day after the forecast! Also, some solid moves today, including those from MIKE and PDLI!
The excitement in the market continues, as does the increase in split announcements! We have several more this week, with ATVI announcing today a small computer concern, announcing in that $35 to $40 range were it is common for such companies.
Remember in this market that targets, although set at generally conservative levels, are 'loose' and we are watching for topping signs on moves that would point to our taking profits. We will continue to point out those topping signs as we see them, and let you know when we are contemplating taking profits. The stops are initial stops that we place within 7% of the buy point, typically below support. In this market we are moving up the stops to protect profits as we realize gains.
BONUS PLAYS: BBI, AFCE, DYII and other recent bonus plays are still looking good!
PMCS (Pmc-Sierra--$18.69; +1.71; optionable): Semiconductor
http://biz.yahoo.com/p/f/flir.html
STATUS: A nice move up from support (50 day and short term MVAs) on a strong dose of volume (16.5 million; avg. 10.4 million). The stock is approaching the 50 day MVA at 20.32; aggressive players can play the move up from here with safer entry points on a move over the resistance. PMCS is another of the previous leading tech stocks that has shown nice improvement in its chart since the first of the month.
BUY POINT: Aggressive: 18.90 on continued rising volume. Stop: 16 (below the 18 day MVA). Break of resistance: 20.45 on continued strong and rising volume. Stop: 19.50
POSITION: Stock and/or January $15 calls to buy (SQL AC).
GPI (Group 1 Automotive--$34.40; +2.60; no options): Dealerships
http://biz.yahoo.com/p/g/gpi.html
STATUS: Breaking out of a cup with handle, having just cleared resistance (handle high at 34) on a strong shot of volume today (285,000; avg. 175,409). The cup has a v-bottom, caused by the market drop September 17. The base, which started at the first of August, has a prior high of 34.95. Shows strong money flow and good buying, and relative strength is breaking out. Target: 41
BUY POINT: A buy on the breakout up to 35.84 on continued strong volume. Stop: 32
POSITION: Stock.
PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: No announcement from FLIR today, but it made a solid move.
BEST PLAYS: Besides the plays set forth below as best plays, there are some other stocks that also look good. These include Pre-Announcements NDN and THQI; Past Split SCHL; Pre-Split PCL and our new Pre-Splits plays; Continuing Candidates STJ, AZO and BJ; and Post-Splits WFMI, CEFT and PDLI.
PRE-ANNOUNCEMENT BEST PLAYS
1) KRON - Announced the split!
2) MI - Closing in on a breakout
KRON (Kronos--$58.49; +0.08; no options): Business equipment. Announced a 3:2 stock split today after hours! It is effective on or about November 15.
http://biz.yahoo.com/p/k/kron.html
STATUS: KRON waited a day after the forecast with earnings to announce its stock split, but better late than never, especially when the stock has a good pattern and is trying to break out. KRON is in a 2-year cup pattern, moving in a handle. Today, after solid earnings were announced after the close Wednesday, the stock hit the breakout buy point with solid volume (246,800; average 191,000), but could not hold the move. The stock dropped back to close, but with the news of the announcement it could be ready to make another try that it can hold. Target: 70.
BUY POINT: Breakout: 62.07 on minimum volume of 225,000. Stop: 57.
POSITION: Stock only.
MI (Marshall & Ilsley--$59.80; +0.91; optionable): Banking: Regional. We are researching a forecast date.
http://biz.yahoo.com/p/m/mi.html
BACKGROUND: Based upon our research it does not appear that MI has ever split its stock. The annual shareholder meeting was on 4-24-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: MI is a continuing breakout over the center of its large 'flying W' pattern, and it is now approaching the left-side highs. However, volume has not been especially strong on the move, decreasing slightly the last two sessions as it continues upward (218,700 today; average 205,000). Still above average, however, but what could happen here is that the stock could pull into a handle before it continues to surge. That would be solid action, as it has made a pretty steady push up the right side of the pattern from the 53 level. An orderly pullback into a handle should hold the 10 day MVA (57.48), which the stock tapped at its low today, but we are going to watch carefully for some higher volume selling, which could trigger us out of positions taken on the break over the pattern center. A strong break over the left side high at 59.98 will revise our target to 70.
BUY POINT: After holding the 58 range on a pullback into a handle, a move to 60.10 on volume of 300,000 or better. Stop: 57.40.
POSITION: Stock and/or December $55 calls to buy (MI LK).
PAST SPLITS BEST PLAYS:
LUV (Southwest Airlines--$16.45; +0.43; optionable): Airline.
http://biz.yahoo.com/p/l/luv.html
STATUS: LUV was finally able to break through tough resistance today, moving through its 50 day MVA (16.14) to close. Volume was higher and approached the average, coming in at 3.39 million (average 3.6 million). This was a solid move after having shown consecutive dojis under the 50 day. It is back in its March-August post-split range, and with the breach of resistance it is in a good position to add shares to our portfolio. We are not looking for a quick play here, as LUV is a long-term hold that rallies to the low 30's and splits with frequency. This is a buying opportunity, one of the few stocks we will do this with.
BUY POINT: To 16.75 on above average volume.
POSITION: Stock.
PRE-SPLITS BEST PLAYS: Remember, we try to grab these as they break out of good patterns or as they start a run right before the split. Not looking for home runs, but looking for those $3 to $4 moves running into the split, watching for topping signs and potential resistance. Not huge money, but it can be very steady. We set our initial stops at the 7-8% range below the purchase price (or just below obvious support), and move them up on a move to preserve our profits.
1) FULL - Doji on the breakout test
2) PSC - A new play!
FULL (H.B. Fuller--$51.99; -0.16; optionable): Chemicals. Splits 2:1 effective 11-19-01.
http://biz.yahoo.com/p/f/full.html
STATUS: Made a good move out of its pennant pattern Monday, although volume was not as strong as we would have liked. Since then it has tested that move, but has held the former pennant high (51.86) and today showed a 'shooting star' doji on increased volume of 60,400 (average 59,800). Looks good, and we will see if we can get some stronger volume on a move back up. The breakout high was 53.62, and the the recent high before the drop was 55.25.
PLAY: A move over 53 on increased volume, with stock and/or November $50 calls to buy (FUQ KJ). Stop: 50.25.
PSC (Philadelphia Suburban--$28.25; +0.75; no options): Water utility. Splits 5:4 effective 12-3-01.
http://biz.yahoo.com/p/p/psc.html
STATUS: Formed a small cup from mid-August, and after a massive climb to an intraday high of 30.80 and pullback (closed that day at 28.50), PSC has held up over its 50 day MVA (27.08) to form a something of a pennant handle. Volume has dipped back, as we want in this type of consolidation, although it was slightly up today (40,800; average 76,000) as PSC made a move back up from the range of the 50 day. Looks good after this consolidation, and we will look for a breakout, using the closing high in the handle as the pivot point, and eyeing that intraday high. Target: 34.
PLAY: A move to 29 on volume of 114,000, with stock.
CONTINUING CANDIDATE BEST PLAYS:
1) RMD - Consolidating on lower volume after the breakout
2) CBH - Moving up in the handle
3) SUI - Making a run back at its high
4) TECD - Trying to breakout
RMD (Resmed--$57.44; +0.06; optionable): Health services.
http://biz.yahoo.com/p/r/rmd.html
BACKGROUND: Last announced a 2:1 split on 2-25-00 with a board meeting. The stock price was $68.
STATUS: Made a strong breakout move last Friday and Monday, bouncing from 52 back over recent highs. RMD is fighting its way back up and is now in the upper range of its May-August cup pattern (high 61.39), consolidating after the recent strong move. After a couple of dojis on decreasing volume, RMD dipped back to 56.40 at its low today before closing slightly up on increased, but still low volume (189,900; average 231,000). We could get some more consolidation out of this one, looking for continued low volume and perhaps a pull back to the 56 level (10 day MVA at 55.21). That would set up nicely in a new cup with handle, and we will look for a breakout from that pattern.
BUY POINT: Perhaps after a bit more of a handle consolidation, a move to 58.45 on volume of 285,000. Stop: 55.
POSITION: Stock and/or January $55 calls to buy (RMD AK).
CBH (Commerce Bancorp--$72.09; +1.28; optionable): Banking
http://biz.yahoo.com/p/c/cbh.html
BACKGROUND: Last announced a 5:4 split on 6-29-98. The stock price was $54.63. The annual shareholder meeting was on 6-20-00 at which time no additional shares were authorized. The company has insufficient shares for a 2:1 split.
STATUS: Since July, CBH has formed the familiar 'v'-shaped cup we have seen since the attacks, recently pulling back into a handle over the support of its 10 day MVA (70.96; 50 day is at 70). The stock made a move up today, running back up on excellent, sharply higher volume of 228,900 (average 144,500). Hit the aggressive target, and now we are looking for a breakout. The former pattern high is at 77.90, made on a break from a cup with handle in July. That is the initial target, but we are looking for a strong move to potentially carry CBH to the 85 range.
BUY POINT: Breakout: 72.82 on volume of 220,000. Stop: 69.
POSITION: December $70 calls to buy (CBH LN).
SUI (Sun Communities--$37.77; +0.82; no options): REIT. Did not get the announcement.
http://biz.yahoo.com/p/s/sui.html
BACKGROUND: Based upon our research it does not appear that SUI has ever split its stock. The annual shareholder meeting was on 5-22-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: SUI is making a big rebound from the fall it took on earnings, bouncing up from just below its 50 day MVA (36.53). Initial volume yesterday was weak, but it got an infusion today, coming in at 50,400 (average 43,500). It is approaching all-time highs at 38, from where it recently dropped after having hit its head several times. With the move we have seen on the bounce, we will see if it the stock slows down and consolidates a bit, holding 37.50 for a build of pressure to blast to that new high. We will need to see some strong volume on that move, and will target 45.
BUY POINT: After consolidating here and holding support at 37.50 range, a move to 38.17 on volume of 75,000, with stock.
TECD (Tech Data--$45.25; +0.25; optionable): Computers wholesale. http://biz.yahoo.com/p/t/tecd.html
BACKGROUND: Last announced a 2:1 split in March 1994. The annual shareholder meeting was on 6-19-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: TECD made a nice breakout move recently, but pulled back and formed a new handle, which is in the form of a small cup. Today it touched all the way down to its 18 day MVA (low of 42.50) in the early market weakness, but then rebounded to hit the breakout point before pulling back. Volume was solid breakout volume (1.5 million; average 804,000), so although it failed on this down-and-up day, it could still be ready to make a move. Not the greatest handle pattern here, but given the market not bad. On the next move we are setting an initial target of 50. Solid money flow.
BUY POINT: Breakout: 46.11 on volume of 1.2 million. Stop: 42.25.
POSITION: Stock and/or December $40 calls to buy (TDQ LH).
POST-SPLITS BEST PLAYS:
1) JNC - Still in the tantalizing consolidation
JNC (John Nuveen--$46.98; +0.43; no options): Financial Services. Split 3:2 effective September 28.
http://biz.yahoo.com/p/j/jnc.html
STATUS: Patience is key as wait for stocks that form tight, lateral consolidations. We will continue to eye this one, watching for the breakout. JNC has been a solid, steady performer as it has trended up over many months. It broke out at the first of October, and has now pulled into a flying plateau pattern that continues to extend, holding over its short-term MVA's (10 & 18 day at 46.70 and 46.29). Volume has been below average and sometimes extremely low, today down to 32,000 (average 59,950), which is fine for this type of pattern. Still looking for a breakout move where we are targeting 52.
PLAY: A move to 47.50 on increased volume in the 90,000 range. Stop: 45. Stock only.
* * *
PRE-ANNOUNCEMENTS REMAINING PLAYS
* * *
JEC (Jacobs Engineering--$66.85; +1.45; optionable): Construction. Forecast to announce a split on 11-1-01 in conjunction with earnings.
http://biz.yahoo.com/p/j/jec.html
BACKGROUND: Based upon our research it does not appear that JEC has ever split its stock. The annual shareholder meeting was on 2-13-01 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
STATUS: JEC is trying to build the right side of its base, forming somewhat of a handle after it hit the July high. The handle started with strong surges and regular pullbacks, but has settled down a bit as it pulls back, with volume dropping to low levels. Today JEC tapped its 50 day MVA at is low of 63.55 before bouncing back up to close (just over the 10 day, at 66.53). Volume continued to decline, coming in at 112,500 (average 267,300). Pretty good action now, and we will look for it to hold the 50 day (which is near the September high) as it goes toward the forecast, and make a move back up toward the breakout at the handle high of 72.19. The all-time high, from the left side of the cup, is at 75.67.
BUY POINT: Aggressive: After holding here, a move back over 68 in a stronger market. Stop: 65. Breakout: 72.35 on volume over 400,000.
POSITION: Aggressive: Stock and/or January $65 calls to buy (JEC AM). Breakout: Stock and/or January $70 calls to buy (JEC AN).
XL (XL Capital--$89.40; -3.42; optionable): Insurance. Forecast to announce a split on 11-5-01 in conjunction with earnings. At this time the company cannot confirm a time for the release.
http://biz.yahoo.com/p/x/xl.html
BACKGROUND: Based upon our research it does not appear that XL has ever split its stock. The annual shareholder meeting was 5-11-01 at which time no shares were increased. The company has sufficient shares for a 2:1 split.
STATUS: XL has made a nice run back up after the attacks, making a new high at 95 (after clearing its June double tops at 84 and the prior high at 90). It has pulled back a bit, and was forming a pennant before falling out of that small pattern today. The move down was a bit concerning as volume was sharply up to 3.32 million (average 1.69 million), although XL did manage to hold the 18 day MVA (89.05, which is at the stock's former highs from last December). We have been looking for the stock to rest a bit and digest its gains, so we will see if it can hold here and set up something new as we go toward the split. Still targeting 100 on a continued strong move after a rest.
BUY POINT: After holding support at this level and consolidating a bit, a move back to 93 on continued strong volume. Stop: 89. The breakout is a move to 95.12 on volume of 2 million or better. Stop: 90.
POSITION: Stock and/or January $90 calls to buy (XL AR).
EASI (Engineered Support--$47.60; +1.62; optionable): Aerospace/Defense. Forecast to announce a split on 12-10-01 in conjunction with earnings. At this time, the company cannot confirm this date.
http://biz.yahoo.com/p/e/easi.html
BACKGROUND: EASI last announced a 5:4 split on 2-1-2001 with a board meeting at a price of $28.50. Before that it announced on 6-12-98 at a price of $26.50. The company has sufficient shares for a 3:2 split.
STATUS: EASI is a defense stock that took off immediately in the wake of the terrorist attacks, but after another solid move out of a small cup with handle (or double bottom), it topped out at 58 and took an abrupt drop. It is currently holding the 50 day MVA (43.74), making a bit of a bounce from that level the last two sessions, but on continued low volume (down a bit to 249,000 today; average 443,600). The low volume could mean that the stock will continue to display support at the 50 day, but it could take a bit of time before this one is ready to make a move it can hang onto. It is right at the highs on the previous two bounces, so could be headed back down to test support again. It is shaping up as something of a head and shoulders, so we will watch support carefully.
BUY POINT: Aggressive momentum: After holding the 50 day, a move over 49 on above average volume. Stop: 46. We carefully protect positions on these types of plays.
POSITION: Stock and/or December $40 calls to buy (UFE LH; no open interests).
EDMC (Education Management--$37.35; +0.98; optionable): Education & Training services. We are researching a date.
http://biz.yahoo.com/p/e/edmc.html
BACKGROUND: Last announced a 2:1 split on 12-2-98 at a stock price of $47. The company has sufficient shares for a 2:1 split.
STATUS: EDMC has formed something of a 'v' bottom cup with handle (once again, the 'v' courtesy of the attacks), but after a strong move back over the convergence of the 50 and 200 day MVA's (50 day at 35.24, 200 day at 34.53), the stock has shown an erratic handle consolidation with lousy price/volume action. Volume was again going the wrong direction today, down to 191,500 (average 468,000) as the stock tapped the 200 day at its low but then made a move up for a decent gain. We will see if it can continue to hold, but we would like to see better action in this consolidation and then big volume on a move up. The consolidation high is at 39.44, with the all-time of 46 set in July.
BUY POINT: After showing that it can hold support here, a move back over 38 on volume in the 1 million range. Stop: 36.
POSITION: Stock and/or December $35 calls to buy (UKN LG - under 100 open interest).
FDC (First Data--$69.84; +0.91; optionable): Working on a forecast date.
http://biz.yahoo.com/p/f/fdc.html
BACKGROUND: Last split was a 2:1 on 11-18-96 at a stock price of $80. The annual shareholder meeting was on 1-11-01 at which time authorized shares were increased. The company has sufficient shares for a 2:1 split.
STATUS: FDC has made a rapid recovery after dropping on the attacks, and is back in the range of its former high (72.25, from July). After a big move over its 50 day MVA (then 62, now 64), FDC appeared to be pulling into a handle, but it never made a definitive breakout move, instead drifting up on volume that has been less than stellar. Today it continued the move, rising on volume that continued to decrease to 1.47 million (average 1.93 million). For current positions we are watching for a drop, but if it is a gentle pullback it could make another attempt at forming a handle, and we would look for that pattern to hold the 10 day MVA (67.08).
BUY POINT: After pulling back and forming a lateral consolidation that holds the 67 range, a move back to 70 on volume of 3 million. Stop: 64.
POSITION: Stock and/or February $65 calls to buy (FDC BM).
End Part 2 of 4
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us stock market
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