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Begin part 3 of 3
THE PLAYS:
A lot of excellent stocks in excellent position!
Good Movers: GILD; HYSL; ISRG; LCAV
New buy point on current leader position:
Play Date: 01/14/2006
SNDK (Sandisk--$72.83; -4.39; optionable): Semiconductor flash memory, etc.
http://biz.yahoo.com/p/s/sndk.html
After Hours: $72.89
STATUS: Breakout test. Another leader in the recent surge, and indeed, in December as well, that is taking a breather after a strong run. SNDK topped out just over 77 last week and then received a downgrade Friday, one of those 'valuation' calls that strong, leading stocks often get. SNDK gapped lower and sold to close near the 10 day EMA (72.16). Volume was above average, but it was also lower. That tells us that while the sellers were in control Friday, they were not stronger than the buyers. Indeed, what this drop is giving us is a gift, a chance to get more positions in a stock that can fly like the wind. What we want to see is the stock find its bottom here and then rebound on solid trade. At that point we know the big buyers are back in and taking positions, our cue to move in.
Volume: 18.32M Avg Volume: 13.865M
BUY POINT: $73.65 Volume=21M Target=$87.95 Stop=$71.78
POSITION: SWF DO - Apr. $75c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/sndk.html
Continuing Leader Play:
Play Date: 01/10/2006
CRM (Salesforce.com--$38.13; -0.12; optionable): On demand customer relationship management services
http://biz.yahoo.com/p/c/crm.html
STATUS: Breakout test. CRM continues its tight lateral move, holding the gains from its early January breakout, refusing to give them back. That is the sign of a strong stock: stinginess with its gains. Volume has faded to well below average, showing no sellers. Love the way it is holding its gains as the market gave some back late last week. That puts it in good position to lead as the market recovers. To recap: CRM gapped higher a week back on an analyst upgrade. That move extended a nice surge off the 50 day EMA (32.60) to start the year after a three week pullback to that level. CRM has filled the gap at the 10 day EMA and rebounded immediately. Nice quick fill of the gap and looking for this strong stock to continue higher. Excellent money flow and a relative strength breakout on the move.
Volume: 700.7K Avg Volume: 1.605M
BUY POINT: $38.65 Volume=2.4M Target=$45.95 Stop=$36.87
POSITION: CRM EG - May $35c (68 delta) &/or Stock
http://www.investmenthouse.com/cs/crm.html
PRE-ANNOUNCEMENT PLAYS
Current Pre-Announcement Plays: Lots of stocks in position for split announcements in January and February. We have some good information on many though some are wild cards, i.e. no split history but hearing word of a possible split announcement. All are good leadership quality stocks that can make us money if they show us the breakout moves.
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.
ANSS: Forecast 2-16-06 before the open.
AAPL: Forecast 1-18-06 or 2-10-06.
ACI: Forecast 2-10-06
ATW: Researching to pinpoint date.
CLE: Forecast 1-26-06
COF: Forecast 1-19-06 after the close
CTSH: Forecast 1-30-06 or 2-10-06
DATK: Hearing that an announcement is possible in mid-February. Looking to pinpoint the date (originally forecast early January).
DBRN: Researching next date, but looking at early February.
DRI: Forecast third week in March.
EOG: Forecast 2-3-06
FTO: Forecast mid-April. Will pinpoint the date shortly.
GIL: Forecast February 1
GILD: Forecast 1-25-06
JEC: Forecast 2-7-06
LCAV: Forecast 1-24-06
LM: Tentatively forecast 1-24-06
LUFK: Tentatively forecast in March
MRVL: Forecast 2-23-06
NOV: Working to pinpoint a date.
ODP: Forecast 2-23-06
PLCE: Forecast 2-3-06
PPDI: Forecast mid-January.
RJF: Forecast 2-9-06
SNDK: Forecast 1-20-06
TECH: Forecast for 1-31-06 before the open.
UPL: Forecast 2-8-06
WIRE: Forecast third week of January
XTO: Forecast 2-15-06
New Pre-Announcement Plays: The pullback in energy is still giving us some good entry points.
Play Date: 01/14/2006
CLF (Cleveland-Cliffs--$95.90; +2.90; optionable): Steel and iron. Forecast to announce a split in second week of February.
BACKGROUND: Last announced a 2:1 split 11-9-04 at $81.40.
http://biz.yahoo.com/p/c/clf.html
STATUS: Test 50 day EMA. After a breakout attempt in September failed to take CLF higher from its 7 month reverse head and shoulders pattern, CLF found renewed strength in November and finally made the move. It immediately fell into the current 6 week pattern, a double bottom with handle that has formed using the 50 day EMA (90.38) as support. Excellent 3:0 accumulation in the base has set up the breakout, and volume was edging higher Friday in a lower volume market. Looks great for the breakout this week.
Volume: 461.7K Avg Volume: 532.641K
BUY POINT: $96.88 Volume=799K Target=$109 Stop=$92.92
POSITION: CLF DT - Apr. $100c (49 delta) &/or Stock
http://www.investmenthouse.com/cs/clf.html
Play Date: 01/14/2006
SLB (Schlumberger--$107.28; +1.87; optionable): Oil and gas service company. Forecast to announce a split 1-20-06 before the open.
BACKGROUND: Last announced a 2:1 split on 4-17-97 at $105.
http://biz.yahoo.com/p/s/slb.html
After Hours: $107.13
STATUS: Breakout test. A long time coming, but SLB is ready for a split after the October breakout from a short 12 week flat base. It has run higher and tested the 50 day EMA (98.27) to end the year. Then it shot higher in January with the other energy stocks. Moving laterally on lower trade the past week. Now the 10 day EMA (105.01) has come up to meet it, and we are looking for that to send SLB higher in the breakout and running into the split announcement. A strong leader in the oil services sector.
Volume: 4.06M Avg Volume: 5.612M
BUY POINT: $108.78 Volume=6M Target=$124.88 Stop=$104.87
POSITION: SLB EB - May $110c (52 delta) &/or Stock
http://www.investmenthouse.com/cs/slb.html
New buy point on current position:
Play Date: 01/14/2006
MRVL (Marvell Technology--$64.46; +0.51; optionable): Semiconductor integrated circuits. Forecast 2-23-06
BACKGROUND: Last announced a 2:1 split 2-26-04 at $42.90.
http://biz.yahoo.com/p/m/mrvl.html
After Hours: $64.25
STATUS: Breakout test. A clear market leader with tremendous momentum and continuing buying. It broke out from a 12 week base in late November at $50. It is making the second test of that breakout move, reaching down to the 10 day EMA (62.34) Friday on the intraday low and rebounding for a modest gain. After the big run higher it needed this breather. It may still come back a bit more to snug up to the 10 day EMA some more, but this stock is a strong with a lot of buying and we want to be ready to move in as it rebounds. Love these strong stocks that have already made us money and are ready to continue the run. We can buy more and focus on the winners. Moreover, MRVL can give us a split announcement soon; icing on the cake.
Volume: 5.7M Avg Volume: 4.084M
BUY POINT: $65.11 Volume=6.1M Target=$74.95 Stop=$62.22
POSITION: UVM EM - May $65c (52 delta) &/or Stock
http://www.investmenthouse.com/ci/mrvl.html
Continuing Pre-Announcement Plays ready to move: Still looking at energy
Play Date: 01/07/2006
EOG (EOG Resources--$80.19; +1.89; optionable): Independent oil and gas. Forecast to announce a split 2-3-06.
BACKGROUND: Announced its only split (2:1) on 2-2-05 at $76.60.
http://biz.yahoo.com/p/e/eog.html
STATUS: Cup w/handle. EOG is looking very good as it puts the finishing touches on its base. Friday was a good day as it moved higher. Volume was lower but still average. Looking for that volume as it continues this move. To recap: After a heck of a January to October move, EOG needed a rest and slipped into the current 15 week base, consolidating for the next break higher to a new all-time high. Strong 4 to 1 accumulation shows plenty of buying as the stock consolidated. It jumped off the 50 day EMA (74.47) on strong volume to start the year as money moved in to energy. It has bunched up along the 18 day EMA, ready to make the next move. Solid fundamentals to go along with the pattern. Primed for a break higher.
Volume: 2.852M Avg Volume: 2.94M
BUY POINT: New: $80.39 (orig. $79.25) Volume=4.5M Target=$91.45 Stop=$75.98
POSITION: EOG DP - Apr. $80c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/eog.html
Play Date: 01/12/2006
FTO (Frontier Oil--$41.86; +1.13; optionable): Oil and gas refining and marketing. Looking for a mid-April announcement as we hear FTO liked the response after its last split.
BACKGROUND: Announced its only 2:1 split on 4-15-05 (tax day) at $39.40.
http://biz.yahoo.com/p/f/fto.html
After Hours: $41.86
STATUS: Double bottom w/handle. A good price move Friday has FTO tapping at the breakout, but volume was not even close yet, coming in well below average. Still solid and just looking for the breakout; we expect the volume will be there given the very nice base. To recap: FTO is forming a prolonged 6 week handle to its 14 week base, moving laterally along the 10 day EMA (40.62). Nice pattern that has formed just below and all-time high. A strong market leader that needed this rest. The leader in its sector with strong fundamentals and a very strong pattern. Volume has yet to swell on this move, and typically trade will jump just before a stock makes its breakout.
Volume: 897.6K Avg Volume: 1.293M
BUY POINT: $42.12 Volume=2M Target=$50 Stop=$40.21
POSITION: FTO GH - July $40c (64 delta) &/or Stock
http://www.investmenthouse.com/cs/fto.html
CONTINUING PRE-SPLIT PLAYS:
Play Date: 01/10/2006
JOSB (Joseph A. Banks--$48.19; -0.13; optionable): Apparel stores. Splits 5:4 on 2-16-06
http://biz.yahoo.com/p/j/josb.html
STATUS: Cup w/handle. Refusing to give any ground as JOSB continues forming the handle to its base, moving laterally in a very tight range on very low volume. Like how it is not giving ground. It is reaching the point where it needs to make the move. Retail was coming to life last week, and that could mean JOSB is going to make its move this week. To recap: Rocky ride for JOSB to start December, gapping lower, but then a big recovery in January, gapping higher. A bit of expectations management got a bit too aggressive with the lowered guidance and then the strong sales. In any event, the action formed a 6 week cup with handle with JOSB moving laterally the past week on lower volume. This base immediately follows the breakout from an 18 week double bottom with handle base. Top rated in its group with strong fundamentals to go along with its technical position setting it up for a new high. Solid 3 to 1 accumulation in the current pattern shows overall accumulation as JOSB sets up for the next move.
Volume: 252.153K Avg Volume: 452.622K
BUY POINT: $49.55 Volume=525K Target=$56.98 Stop=$47.89
POSITION: QZS DJ - Apr. $50c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/josb.html
Play Date: 01/12/2006
TALX (Talx Corp.--$52.64; +0.57; optionable): Enterprise software. Splits 3:2 on 1-18-06
http://biz.yahoo.com/p/t/talx.html
STATUS: Breakout test. Major leader that looks ready to rebound as it moves into its split this week. Strong surge to start the year, great test last week as the 10 day EMA (50.80) is rising to meet it. With just a few days left ahead of its split, TALX looks ready. Strongest stock in its sector both technically and fundamentally, and it is also a market leader. Volume needs to show more strength as it continues higher through the buy point.
Volume: 191.051K Avg Volume: 275.43K
BUY POINT: $52.88 Volume=400K Target=$60 Stop=$50.98
POSITION: TUB CJ - Mar. $50c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/talx.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 01/11/2006
JCOM (J2 Global Communications--$47.12; +0.31; optionable): Outsourced & value-added messaging and communications services.
http://biz.yahoo.com/p/j/jcom.html
After Hours: $47.07
STATUS: Double bottom w/handle. JCOM continues forming its nice base, working in a tight range on very low volume as the 10 day EMA (46.63) rises to meet it. Nice quiet end to the week is setting up the breakout. To recap: JCOM is working sideways just below resistance at 48, forming the handle to a short but nicely formed 6 week base. The current pattern is the tail end of a larger, 27 month base; a breakout takes it to a new all-time high and puts it in great position to rally when that move occurs. A top rated stock from a technical and fundamental position. Want to see strong volume pour in as JCOM makes its breakout move.
Volume: 196.101K Avg Volume: 505.377K
BUY POINT: $48.28Volume=769K Target=$55.95 Stop=$46.32
POSITION: JQF FJ - June $50c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/jcom.html
Play Date: 01/12/2006
QSII (Quality Systems--$80.5; -0.1; optionable): Healthcare information software
http://biz.yahoo.com/p/q/qsii.html
STATUS: Cup. Nice tight doji Friday as QSII tapped the 18 day EMA (78.98) on the low and rebounded slightly to close flat on very low volume. Nice test of the strong run to start the year, and the doji on the candlestick chart suggests it is ready to resume the move after this short pause. To recap: A short but nice 7 week base has formed after a strong run as QSII sets up for a breakout to its next all-time high. It used the 50 day EMA (77.53) as the support for the pattern, an indication that the big money is hanging with it even as it rests. May spend another session or two making the pullback, but we want to be ready if it takes off quickly. Positive accumulation in this pattern. The best in its sector with strong fundamentals to go with the pattern.
Volume: 152.865K Avg Volume: 272.311K
BUY POINT: $81.25 Volume=414K Target=$93.45 Stop=$78.89
POSITION: QCR FP - June $80c (55 delta) &/or stock
http://www.investmenthouse.com/cs/qsii.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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