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Begin part 3 of 3
THE PLAYS: The selling last week set up the leaders for a resumed move. They look solid if the market is ready to continue. Energy will probably continue higher in any event.
New Post-Split Plays:
Play Date: 02/04/2006
AMMD (American Medical Systems--$21.62; -0.32; optionable): Medical appliances
http://biz.yahoo.com/p/a/ammd.html
STATUS: Cup w/handle. AMMD is forming a handle to its 6 month base that is forming below an all-time high, setting up the next breakout and run. Strong volume in January as it formed the right side of the base, and now low, below average volume as it tests the 18 day EMA (21.48) and forms the handle. Looking for that volume to return as AMMD breaks out from this nicely formed base. Accumulation is a solid 6 to 4 (6 up price weeks on rising volume to 4 down price weeks on rising volume), showing net buying that sets up the breakout and run higher.
Volume: 379.513K Avg Volume: 638.152K
BUY POINT: $22.95 Volume=957K Target=$27.55 Stop=$21.27
POSITION: FGU EX - May $22.50c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/ammd.html
New Leader Plays: These stocks could turn into pre-announcement plays. The patterns are solid as are the stocks, and they can make us money as they breakout from these bases.
Play Date: 02/04/2006
FFIV (F5 Networks--$63.03; -0.42; optionable): Internet traffic management products & services
http://biz.yahoo.com/p/f/ffiv.html
After Hours: $62.98
STATUS: Cup w/handle. FFIV has formed a short 5 week base using the 50 day EMA (58.24) as support, a key support level for stocks as big money uses these tests to add to positions. It broke out from a 10 month cup with handle base to start January, rallied some, and then fell into the current base when it sold off sharply when YHOO announced earnings. FFIV announced its own about a week lateral and gapped back up. It looks as if it is just about ready to complete the handle to the new base, holding the 10 day EMA (62.94) on the Friday close. May take a couple more days to finish the pattern, but a market leader and the leader in its group. When it moves, it moves in a hurry.
Volume: 571.132K Avg Volume: 1.1M
BUY POINT: $64.45 Volume=1.7M Target=$76.95 Stop=$62.65
POSITION: FLK GM - July $65c (48 delta) &/or Stock
http://www.investmenthouse.com/cs/ffiv.html
Play Date: 02/04/2006
SLAB (Silicon Labs--$49.40; +1.61; optionable): Semiconductors
http://biz.yahoo.com/p/s/slab.html
After Hours: $49.50
STATUS: Breakout test. SLAB gapped higher the fourth week of January on a strong earnings report, breaking out from a two year cup with handle pattern. It came back to test the 10 day EMA (47.43) last week, and then bounced Friday on rising, above average volume. Strong stock in a strong sector. Looking to start the play on a continued volume move higher as SLAB follows the strong money flow higher. Relative strength broke out on the move, a good corroboration of the stock move.
Volume: 1.871M Avg Volume: 1.189M
BUY POINT: $50.12 Volume=1.6M Target=$59.95 Stop=$47.68
POSITION: QFJ GJ - July $50c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/slab.html
PRE-ANNOUNCEMENT PLAYS
Current Pre-Announcement Plays: Lots of stocks still in position for split announcements. 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.
AAPL: Forecast 2-10-06
ACI: Forecast 2-10-06. Still watching to see if ACI will set up and give us an entry point ahead of the forecast date.
BIO: Forecast 2-16-06
CLF: Forecast second week of February. This is the week for CLF. Held the 10 day EMA with a doji Friday.
CNQ: Forecast 2-23-06
CTSH: Forecast 2-10-06
DAKT: Forecast 2-15-06
DBRN: Researching next date; looking at February for this strong stock.
DRI: Forecast third week in March.
DVN: Forecast 2-15-06
EOG: Forecast 2-3-06. No split announced and testing support at the 50 day.
FTO: Forecast mid-April
HAL: No announcement last week. Letting it test the 10 day EMA for now.
HOC: Forecast 2-13-06
GILD: Researching next date as GILD continues its trend higher.
GVA: Forecast 2-15-06
JEC: Forecast 2-7-06
LCAV: Researching next potential date as no announcement 1-24-06.
LUFK: Tentatively forecast in March
MRVL: Forecast 2-23-06. Testing the gap higher
NOV: Forecast 2-24-06
ODP: Forecast 2-23-06
PPDI: Forecast 2-8-06 after the close.
PTEN: Forecast 3-16-06
RJF: Forecast 2-9-06
RIO: Researching exact date. Undercut the 18 day EMA intraday but rebounded to hold that level.
SNDK: No split announced 1-26-06 after the close.
SU: Researching next date as no late January announcement.
TLM: Forecast 3-1-06
UPL: Forecast 2-8-06
XTO: Forecast 2-15-06
New Pre-Announcement Plays:
Play Date: 02/04/2006
PNRA (Panera Bread--$71.35; +0.71; optionable): Restaurants. Forecast to announce 2-9-06 after the close.
BACKGROUND: Announced its only 2:1 split on 4-10-02 at $62.00
http://biz.yahoo.com/p/p/pnra.html
STATUS: Cup w/handle. PNRA is ready to make the breakout from its current 7 week base that formed on the heels of a 5 month cup with handle and breakout in mid-November. This quick consolidation in the current base has set up a nice run ahead for PNRA. Strong 3 to 1 accumulation in the current base (3 up price weeks on rising volume to 1 down price weeks on rising volume) shows buying as it consolidated, complementing the good money flow. Volume started higher Friday as PNRA moved toward the breakout, and relative strength is ready for the breakout as well. Solid leader ready to lead higher once more.
Volume: 499.724K Avg Volume: 533.814K
BUY POINT: $71.72 Volume=801K Target=$82.55 Stop=$68.55
POSITION: UPA EN - May $70c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/pnra.html
Play Date: 02/04/2006
BHI (Baker Hughes--$73.93; -0.1; optionable): Oil and gas services company. Researching date.
BACKGROUND: Last announced a 2:1 split on 4-26-02 at $36.
http://biz.yahoo.com/p/b/bhi.html
STATUS: Test 18 day EMA. Strong breakout in earl January and subsequent run higher from a 12 week double bottom with handle base. Peaked at 78 in late January and has tested thus far this month. Tapping at the 18 day EMA (72.36) the past two sessions, rebounding to close roughly flat. That shows buyers stepping in as it makes the tests. The oil and gas services sector has been hot and announcing splits as well. BHI is long overdue, and this pullback is setting up a buying point for us. Looking for the stock to rebound on strong trade to start the play.
Volume: 3.412M Avg Volume: 3.54M
BUY POINT: $75.65 Volume=4.2M Target=$88 Stop=$72.22
POSITION: BHI GO - July $75c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/bhi.html
New Buy Point on current Pre-Announcement play:
Play Date: 02/04/2006
LUFK (Lufkin Industries--$64; -0.34; optionable): Oil and gas services, equipment. Looking to pinpoint a date in March.
BACKGROUND: Last announced a 2:1 split 3-22-05 at $43.60.
http://biz.yahoo.com/p/l/lufk.html
After Hours: $64.20
STATUS: Test breakout. LUFK is another oil services company that is testing its breakout, coming back to the 18 day EMA (62.80) last week on mostly lower volume. This follows the nice breakout and run higher in January. Excellent breakout and run, and this test gives us another entry point for the play.
Volume: 154.652K Avg Volume: 239.337K
BUY POINT: $64.88 Volume=359K Target=$77.85 Stop=$62.65
POSITION: URF FM - June $65c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/lufk.html
Play Date: 02/04/2006
SU (Suncor Energy--$78.32; -0.53; optionable): Tar sands mining for light sweet crude. Researching next potential date.
BACKGROUND: Last announced a 2:1 split on 4-26-02 at $36.
http://biz.yahoo.com/p/s/su.html
STATUS: Test breakout. SU is making its third test of its breakout from a 15 week base, coming back to the 10 day EMA (76.91) last week to test the move. It tapped at that level on the intraday lows and rebounded, showing buyers moving in on the pullbacks. This is its third test; it still has more upside and the way this stock runs, we don't need but another bounce or two to make us a lot of nice gain. May take another couple of sessions to set the pullback and start the move. Want to see the volume come in as it does.
Volume: 2.062M Avg Volume: 2.481M
BUY POINT: $79.75 Volume=3M Target=$95 Stop=$76.45
POSITION: SU FP - June $80c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/su.html
Continuing Pre-Announcement Plays ready to move
Play Date: 01/28/2006
GVA (Granite Construction--$39.99; +0.34; optionable): Heavy construction. Forecast 2-15-06.
BACKGROUND: Last announced a 3:2 split on 2-21-01 at $32.
http://biz.yahoo.com/p/g/gva.html
STATUS: Breakout test. Nice test of the 18 day EMA (39.48), testing the mid-January breakout from its base that formed using the 50 day EMA (38.21) as support. Nicely set up to resume the breakout this week. To recap: It has been awhile but GVA has surpassed the prior split level for the first time, breaking out from an 18 week base last week on very strong trade. Nicely formed ascending base sporting solid 5 to 3 accumulation; net buying during the consolidation that set up the next breakout and run. Solid money flow is leading, and relative strength broke out with the stock price, a good corroboration of its strength. Excellent fundamentals.
Volume: 218.4K Avg Volume: 214.205K
BUY POINT: New: $40.05 (orig. $41.11) Volume=337K Target=$48.88 Stop=$39.54
POSITION: GVA FH - June $40c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/gva.html
Play Date: 02/02/2006
HAL (Halliburton--$77.4; -0.32; optionable): Oil and gas service company
BACKGROUND: Last announced a split 6-10-97 at $80.
http://biz.yahoo.com/p/h/hal.html
After Hours: $77.49
STATUS: Test breakout. Still the nice test of the 10 day EMA (76.92), testing below that level on the lows and rebounding to hold it on the close. Holding up very well, even better than most of the other oil and gas service stocks. Looking for the move this week. To recap: Going back to the well on this one again, as it makes the second test of the 10 day EMA following its mid-January break higher from a nicely formed 14 week base. HAL looks to have just about completed the pullback to test the strong late January move that saw it gap higher. Looking to move back in as HAL rebounds off this near support.
Volume: 8.536M Avg Volume: 7.293M
BUY POINT: $78.55 Volume=11M Target=$90 Stop=$76.54
POSITION: HAL GP - July $80c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/hal.html
Play Date: 01/26/2006
HOC (Holly Corp.--$68.91; -0.74; optionable): Oil and gas refining. Potential to announce a split 2-13-06 before the open.
BACKGROUND: Last announced a 2:1 split on 8-2-04 at $39.50. Before that a 2:1 on 6-8-01 at 42.50.
http://biz.yahoo.com/p/h/hoc.html
STATUS: Breakout test. Has found the 18 day EMA (68.28) on the test, volume returning to very low, below average levels Friday. This level holds the breakout and sets it up for the next leg higher, i.e. a good entry point when it rebounds through the 10 day EMA (69.77). To recap: Nice mid-January breakout from a solid 14 week ascending base sporting solid 5 to 3 accumulation. Used the 50 day EMA (64.36) as support for the base, a key level. Nice test and need to see a strong rebound on volume.
Volume: 186.9K Avg Volume: 286.265K
BUY POINT: $70.32 Volume=350K Target=$82 Stop=$71
POSITION: HOC FN - June $70c (52 delta) &/or Stock
http://www.investmenthouse.com/cs/hoc.html
CONTINUING PRE-SPLIT PLAYS:
Play Date: 02/01/2006
WBSN (Websense--$66.81; -0.27; optionable): Internet control software for employers. Splits 2:1 on 3-20-06
http://biz.yahoo.com/p/w/wbsn.html
After Hours: $66.90
STATUS: Double bottom w/handle. Started forming the handle last week, working laterally as volume backed off to below average levels Friday. It will take another couple of sessions or so to complete the handle and set up the next breakout, but it is worth waiting for as this leader sets up for another run into all-time high territory. Strong stock, great fundamentals and technical pattern.
Volume: 424.286K Avg Volume: 532.295K
BUY POINT: $67.95 Volume=750K Target=$78 Stop=$64.95
POSITION: DQH GM - July $65c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/wbsn.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 01/31/2006
CHRW (C.H. Robinson Worldwide--$39.61; -0.04; optionable): Air delivery & freight
http://biz.yahoo.com/p/c/chrw.html
After Hours: $39.61
STATUS: Double bottom w/handle. Has just about completed the handle with Friday's reach down to the 18 day EMA on the low and recovery to hold the 10 day EMA (39.41). That looks like the final shakeout needed to set up the breakout. To recap: CHRW has started a nice lateral move this week after a picture perfect 9 week base formed using the 50 day EMA (37.91) on the lows as support. Excellent 4 to 1 accumulation in the pattern (4 up price weeks on rising volume to 1 down price weeks on rising volume) has set up the breakout to a new all-time high. Great pattern and great fundamentals.
Volume: 613.79K Avg Volume: 933.592K
BUY POINT: $41.49 Volume=1.4M Target=$49.75 Stop=$39.05
POSITION: CJQ EH - May $40c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/chrw.html
Play Date: 02/01/2006
CVH (Coventry Health Care--$60.46; -0.29; optionable): Health care plans
http://biz.yahoo.com/p/c/cvh.html
STATUS: Ascending base. Nice doji Friday that reached toward the 10 day EMA (59.43) on the low and rebounded to cut its losses to a fraction. Excellent test of the Wednesday breakout as the market struggled, holding above the top of the base on lower, below average volume. Looks ready to continue the breakout move this week. To recap: CVH had formed a nice 14 week base that was making some higher lows along the 50 day EMA (57.92) the past 6 weeks. This base formed following the mid-October split; CVH had run for 13 months and needed a breather. This base gave it that rest. Excellent 5 to 2 accumulation (5 up price weeks on rising volume to 2 down price weeks on rising volume) shows excellent buying. Looking to move in and start the play on a continued move higher and then again after the breakout test is complete.
Volume: 949.1K Avg Volume: 1.252M
BUY POINT: $61.57 Volume=1.3M Target=$70.95 Stop=$59.95
POSITION: CVH GL - July $60c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/cvh.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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