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Begin part 3 of 3
THE PLAYS:
New Pre-Split Plays:
Play Date: 02/07/2006
CNI (Canadian Natl. Railway--$89.41; -1.31; optionable): Railroads. Splits 2:1 on 3-1-06
http://biz.yahoo.com/p/c/cni.html
STATUS: Test 10 day EMA. Storng surge higher in January is now being tested, coming back to the 10 day EMA (88.67) the past week on much lower volume. Solid breakout from a 7 week double bottom over the 50 day EMA (82.25) and a nice, easy test to set up the next move higher. Volume moved higher Tuesday as it eased back to the 10 day EMA but still below average. Held up well during this selling and just waiting for the bounce higher to make some good money on the pre-split run.
Volume: 544.9K Avg Volume: 565.764K
BUY POINT: $90.45 Volume=800K Target=$101.95 Stop=$88.21
POSITION: CNI GR - July $90c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/cni.html
Play Date: 02/07/2006
QLGC (Qlogic--$39.46; -0.43; optionable): I/O products, switches, semiconductors. Splits 2:1 on 3-3-06
http://biz.yahoo.com/p/q/qlgc.html
After Hours: $39.50
STATUS: Cup w/handle. QLGC has formed a big 12 month base and is now moving laterally over the 10 day EMA (39.22) on low volume, shaking out the profit takers from the last run higher. May take a few more sessions to get ready and set up the breakout move. Strong money flow is leading and relative strength is solid.
Volume: 1.438M Avg Volume: 1.742M
BUY POINT: $40.25 Volume=2.2M Target=$46.35 Stop=$38.89
POSITION: QLC GH - July $40c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/qlgc.html
Play Date: 02/07/2006
QSII (Quality Systems--$88.22; -2.66; optionable): Healthcare information systems. Splits 2:1 on 3-24-06
http://biz.yahoo.com/p/q/qsii.html
STATUS: Cup w/handle. QSII jumped higher in late January, tested, and jumped again Monday on strong volume. The move took it out of a nice 9 week reverse head and shoulders. The test has formed a handle, making it something of a nice cup with handle that formed over the 50 day EMA (80.86). We booked some gain Tuesday because on a pre-split a stock can get kind of volatile. Looking for another entry point, and a test of the 10 day EMA (86.42) and bounce would be it. Want to be ready for a move from here as well; strong stock and a good pattern that is again setting up for a new all-time high despite the market. The sector helps.
Volume: 188.833K Avg Volume: 281.584K
BUY POINT: From Tuesday close: $89.25. Test 86.50: $87.55 on the rebound. Volume=335K Target=$99.95 Stop=$86.38
POSITION: QCR FR - June $90c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/qsii.html
New Post-Split Play: Right sector for this market
Play Date: 02/07/2006
DADE (Dade Behring Holdings--$41; +0.78; optionable): Diagnostic substances
http://biz.yahoo.com/p/d/dade.html
STATUS: Test 50 day EMA. DADE broke out from a 14 week base in early November and rallied to 41. It has worked laterally the past 8 weeks, coming back to test the 50 day EMA (40.43), holding, then starting higher this month on rising volume. Stronger trade Tuesday as it bounced up off the 50 day. Strong 4 to 0 accumulation in the current lateral move shows all buying (4 up price weeks on rising volume to 0 down price weeks on rising volume). Strong money flow is leading higher and relative strength is making the breakout move. Solid, having set up well after its August split.
Volume: 805.16K Avg Volume: 544.033K
BUY POINT: $41.55 Volume=800K Target=$47.95 Stop=$39.89
POSITION: JDQ EH - May $40c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/dade.html
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--$62.59; -1.1; optionable): Internet traffic management products & services
http://biz.yahoo.com/p/f/ffiv.html
STATUS: Cup w/handle. Still in the short pattern, testing the 18 day EMA (62.17) Tuesday on lower, very low volume. Not bad action in a week market. Being patient and letting it show us the upside move. To recap: FFIV has formed a short 5 week base using the 50 day EMA (58.62) 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 and 18 day EMA. 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: 564.189K Avg Volume: 1.099M
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--$48.84; +0.53; optionable): Semiconductors
http://biz.yahoo.com/p/s/slab.html
After Hours: $48.85
STATUS: Breakout test. Nice test of the 10 day EMA (48.02) as most of the market sold, showing a doji at that level and a modest bounce as volume moved back up above average. Looks solid. To recap: 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 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: 1.336M Avg Volume: 1.199M
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. Got really ugly Monday, breaking lower on strong volume
ACI: Forecast 2-10-06. Thudded down to the 50 day EMA. Managed to hold.
BIO: Forecast 2-16-06
CLF: Forecast second week of February. Good move Monday, dump lower Tuesday on strong volume.
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
FTO: Forecast mid-April
HAL: No announcement last week. Struggling, falling through the 18 day EMA on stronger volume.
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. No word on a split but strong volume as it holds over the 10 day EMA.
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
PNRA: Forecast 2-9-06 after the close.
PPDI: Forecast 2-8-06 after the close.
PTEN: Forecast 3-16-06
RJF: Forecast 2-9-06
RIO: Researching exact date. Has to set back up.
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: 02/07/2006
DBRN (Dress Barn--$45.27; -0.01; optionable): Apparel stores. Forecast late February.
BACKGROUND: Last announced a 2:1 split on 5-2-02 at $31
http://biz.yahoo.com/p/d/dbrn.html
STATUS: Test 10 day EMA. DBRN broke out in late November from a 16 week base and has rallied up the 10 and 18 day EMA. It is making its third test of the 10 day EMA (44.66), easing back to that level the past week on very low volume after a strong rally to close out January. A strong stock such as DBRN will make four to five runs off the 10 or 18 day EMA after a breakout before it needs a test. This stock is ignoring the market, going about its test and showing very little selling. Strong money flow continues higher and relative strength is ready to make a breakout once more as well. Very strong.
Volume: 510.13K Avg Volume: 802.173K
BUY POINT: $45.88 Volume=1.1M Target=$52.95 Stop=$43.88
POSITION: DTQ FI - June $45c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/dbrn.html
Continuing Pre-Announcement Plays ready to move
Play Date: 02/04/2006
PNRA (Panera Bread--$71.24; +0.27; 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. Still working laterally after gapping higher last week, moving on continued below average volume. Setting up well for the break higher that takes it out of this pattern and onto a new all-time high. To recap: 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: 347.346K Avg Volume: 533.321K
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
CONTINUING PRE-SPLIT PLAYS:
Play Date: 02/02/2006
VSEA (Varian Semiconductor--$51.96; +0.61; optionable): Chip equipment. Splits 2:1 on 3-1-06
http://biz.yahoo.com/p/v/vsea.html
After Hours: $51.78
STATUS: Breakout test. Ignoring the market, climbing higher the past two sessions, but volume is still well below average. Has moved up to the recent highs. Need to see more volume as it makes the next move. To recap: VSEA is working up the 18 day EMA (49.84) after the early January breakout from its 18 week reverse head and shoulders base. After a strong surge last week VSEA has tested the 10 and 18 day EMA, preparing for the next run higher. Relative strength is ready to make the breakout as well, a good corroboration of any price move.
Volume: 458.209K Avg Volume: 783.952K
BUY POINT: New: $52.12 (orig. $51.35) Volume=1.4M Target=$58.78 Stop=$49.89
POSITION: UES EJ - May $50c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/vsea.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 02/04/2006
AMMD (American Medical Systems--$21.62; -0.28; optionable): Medical appliances
http://biz.yahoo.com/p/a/ammd.html
STATUS: Cup w/handle. Testing the 18 day EMA still, biding its time for the break higher. Still solid and in a good sector for this market. To recap: 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 (21.53) 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: 719.521K Avg Volume: 648.519K
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
Play Date: 01/31/2006
CHRW (C.H. Robinson Worldwide--$40.71; +0.29; optionable): Air delivery & freight
http://biz.yahoo.com/p/c/chrw.html
After Hours: $41.28
STATUS: Double bottom w/handle. Gapped higher on strong volume Tuesday, rallying to 41.60. Could not hold the move, but still looking very solid and ready to give us the breakout and run. To recap: CHRW has started a nice lateral move this week after a picture perfect 9 week base formed using the 50 day EMA (38.11) 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: 1.272M Avg Volume: 905.163K
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--$59.62; -0.76; optionable): Health care plans
http://biz.yahoo.com/p/c/cvh.html
STATUS: Ascending base. Sold some, tapping the 18 day EMA (59.10) on the lwo and rebounding to hold the 10 day EMA (59.61). Nice test and ready to make the continued breakout move. 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: 1.03M Avg Volume: 1.231M
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
Play Date: 02/06/2006
TRID (Trident Microsystems--$25.76; +1.16; optionable): Semiconductors
http://biz.yahoo.com/p/t/trid.html
STATUS: Test 18 day EMA. Holding up well in the selling, tapping at the 18 day EMA (24.05) again on the low and rebounding to hold the 10 day EMA on the close. Nice action that is setting it up for the continued run. To recap: TRID is making the second test of the December breakout from a 16 week flat base. Strong rally using the 18 day EMA as support. Strong move the last week of January sent TRID higher and now it is testing that move, tapping at the 18 day EMA on the Monday intraday low and rebounding for a solid gain. Volume did not rally with it on that move, but we anticipate it will be there as it continues. Strong money flow moving higher ahead of the price. Relative strength broke out on the price move, a good sign of a strong stock. Strong fundamental growth to go along with the price pattern. Ready to move in on a continued move through the buy point that shows a jump in volume.
Volume: 1.292M Avg Volume: 2.015M
BUY POINT: $26.05 Volume=2.5M Target=$31.25 Stop=$24.35
POSITION: HVU GE - July $25c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/trid.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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