stock watch, stock split

Begin Part 3 of 4

POST-SPLITS BEST PLAYS:
1) PDLI - Great move!

PDLI (Protein Design Labs--$36.84; +3.39; optionable): Biotechnology. Splits 2:1 effective October 12.
http://biz.yahoo.com/p/p/pdli.html
STATUS: Great move today. PDLI was one of the stocks we were focusing on to make a solid move Tuesday, and it did not disappoint, gapping over its 10 day MVA (34.68) and continuing up on increased, solid volume (3.74 million; average 2.17 million). PDLI hit a high of 37.50 last week, but made a pullback that held the 18 day MVA (33.46) with a loose 'hammer' doji, which is a solid signal of a bounce. It is moving in something of a handle to a cup dating back to June. Looking at continuing to ride positions, watching the recent high as possible resistance, and we will look at a breakout of the handle for new or additional positions. PDLI is a solid mover in a good market. The cup is the right side of a large double bottom which extends back to November 2000 highs over 70, so we have a lot of overhead. Target: 45.
PLAY: 37.62 on volume of 3.3 million, with stock and/or December or February $30 calls to buy (PQI KF or PQI BF). Stop: 35.50.

* * *
REMAINING PLAYS:

PRE-ANNOUNCEMENTS REMAINING PLAYS:

Watchlist:

EASI (45.50; -2.24): Dropped through support (the 50 day MVA, at 46.26) on increased volume (405,400; average 453,000). We will see if it will recover.

GTK (44.95; +1.20): Bounced back up again on increased volume, but comparatively low (306,300; average 314,200). Still looking for GTK to hold support (10 day MVA at 49) and consolidate its gains before we look at new positions.

TRDO ($26.74; -0.64): Have not gotten the bounce from the 50 day MVA (27.13), and the stock gave up that support today on low volume (193,700; average 315,400).

XL ($92.75; +0.84): Has tried to recover, but volume has dropped significantly. We will see if it can form up in a better pattern.

Plays:

EDS (Electronic Data System--$68.50; +1.53; optionable): We are researching a date.
http://biz.yahoo.com/p/e/eds.html
BACKGROUND: Last announced a 2:1 split on 3-9-92 at a stock price of $60. 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: Gapped up but on light volume. EDS has ranged between 53-67 since the beginning of the year, rallying back since the attacks from the 54 range. Last week EDS broke back over the prior high for the year (67.40, from March), hitting a high of 68.95 before dropping back. The pullback was nice, coming on decreasing volume and holding its 10 day MVA (66.45), and it responded with a gap up today that closed just below the breakout high. However, volume was not overwhelming, up to 3.12 million (just below the average of 3.14 million). We could get a test back from here, and we would again watch for it to hold the 10 day on that move. For positions from here we would need to a see a strong move, and on the way up we will watch the all-time highs (from 2000) at 75. That will be the initial target.
BUY POINT: From here: 69 on volume of 4 million. Stop: 66.
POSITION: Stock and/or January $65 calls to buy (EDS AM).

NDN (99 Cents Only Stores--$33.60; +0.54; optionable): Retail. Researching a date.
http://biz.yahoo.com/p/n/ndn.html
STATUS: Looking weak. NDN tanked back hard last week, and closed back below the 50 day MVA (33.24) on selling Friday. It has taken a relief bounce, and on Tuesday's market strength it gapped back over the 50 day, but could only manage a doji on reduced volume (317,500; average 352,000). Not a convincing recovery, and it still faces the short-term MVA's (34.14), so we will continue to watch for a strong drop down, triggering a put play and targeting the 200 day MVA (29), although watching the 30 level as possible support.
BUY POINT: A drop back through 32 on above average volume.
POSITION: December $40 puts to buy (NDN XH).

FDC (First Data--$73.26; +1.74; 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: Broke out today but on weak volume. FDC had pulled into a brief handle over its 10 day MVA (71.04) after having made its way back up toward the left side high in its cup pattern (July high of 72.25). The move up in the cup for the last several weeks had been on low volume, which was a concern, as we like to see accumulation in the right side of the pattern. On today's breakout, although volume was up, it was below average at 1.87 million (average 1.98 million); we like to see breakout volume in this type of pattern at 1.5 times the average. We will likely see a pullback, where we will watch for FDC to perhaps visit the 18 day (69.63) and form a better handle. However, we need to be prepared for a potential visit to the 50 day (67) given the weak moves up. We were targeting 82 on a strong breakout.
BUY POINT: From here, an aggressive buy up to 75.84, but we must see breakout volume at 3 million. Stop: 70.
POSITION: Stock and/or February $70 calls to buy (FDC BN).

THQI (Thq Inc--$54.76; +0.96; optionable): We are working on a date.
http://biz.yahoo.com/p/t/thqi.html
BACKGROUND: Last announced a 3:2 split on 10-26-99 in conjunction with earnings. The stock price was $44. Prior to that announced a 3:2 split on 7-23-98 in conjunction with earnings. The stock price was $33. The company has sufficient shares for a 2:1 split.
STATUS: THQI made a strong breakout (from a ragged cup with handle), but hit resistance at the up trendline connecting the August lows (and which provided resistance at the October high). After a strong drop, it took a small, rather weak bounce today, not waiting to go all the way to the 50 day (51.10) to try to run back up. Not much of a pattern, but if it can hold here we will see if it can make another run in a rally. Targeting resistance on a move at 60.
BUY POINT: If it can hold the 52.50 range on lower volume, a move over 56 in a rally with volume of 2 million or better.
POSITION: December $50 calls to buy (QHI LJ).

FORMER SPLITS REMAINING PLAYS: As the market finds itself, we are focusing on some of the stocks that have shown a propensity to split and which are looking solid.

Watchlist:

SCHL ($45.81; +0.05): Still holding the handle to its cup, today hitting up to 47.08 before pulling back, moving on a big volume spike (419,300; average 226,600). Still looking for the breakout at 48.36 on volume of 340,000, with stock and/or December $45 calls to buy (USC LI).

Plays:

TARO (Taro Pharmaceuticals--$38.58; -1.41; optionable): Drugs.
http://biz.yahoo.com/p/t/taro.html
STATUS: Got the move down to trigger the put. TARO gapped up but pulled back again, dropping through its 50 day MVA (40.10), moving on increased, strong selling volume of 1.53 million (average 697,200). We can look at new or additional positions on a continued fall from here, or a failed test back up to the 50 day. Another breakout gone bad. Has been a strong stock, but the selling is severe. Target: 34 (watching potential support at 36), but we could get a drop to 200 day MVA (32).
BUY POINT: Test: After another failed attempt to move over the 50 day, a drop back below 39 on continued strong volume. From here: A drop through 38 on continued strong volume.
POSITION: Test: December $47.50 puts to buy (QTT XA). From here: December $45 puts to buy (QTT XI).

PRE-SPLITS REMAINING PLAYS:

Watchlist:

PCL (28.47; +0.32): News report of PCL's split announcement were erroneous. We are dropping.

PBG ($47.08; +0.14): Splits 2:1 effective 12-5-01. Did not make a strong bounce from the 50 day, today showing a doji under resistance (short term MVA's at 47.15) on bigger volume. We will see if it tests the 50 day again first. Still a move over 47.50 with increased volume (today 682,400; average 628,000), with stock and/or December $45 calls to buy (PBG LI).

EPIQ ($36.68; +0.60): Splits 3:2 effective December 1. Gapped up and reversed, so we are looking for a move down to recent support (10 day at 33.30) where we can then look at a possible move back up.

Plays:

MIKE (Michaels Stores--$56.15; +1.00; optionable): Splits 2:1 effective November 15.
http://biz.yahoo.com/p/m/mike.html
STATUS: MIKE is showing pre-split volatility now. It broke out again last Thursday, reversed the next sessions, and has pushed back up off the 10 day MVA (53.56) this week. Today it reached a new high at 56.91 before pulling back a bit to close, moving on increased volume (609,700; average 475,000). The pullback off the high could signal that MIKE is ready to move back again to support before the split Thursday, but given how extended the move has been over the last couple of months with MIKE, we have been carefully protecting positions already. We are ready to exit existing short-term plays, and are not too excited about new plays from here, but the aggressive can try a quick play.
PLAY: Aggressive: A move to 57 on increased volume, with stock and/or December $50 calls to buy (IKQ LJ). Carefully protecting with tight stops. Once again, this could be a quick play, looking to get out upon topping signs.

KRON (Kronos--$62.59; +1.20; no options): Business equipment. Announced a 3:2 stock split, effective on November 16.
http://biz.yahoo.com/p/k/kron.html
STATUS: KRON made a solid breakout recently from its wedging handle to a cup pattern (dating back to January 2000, with highs at 80), but since has pulled back gradually. Still looking pretty good, although today it gapped up and hit near its breakout high (63.93) before pulling back with a doji. Volume was sharply up at 202,500 (average 178,000), and this pattern typically means a pullback. We will watch for it to possibly visit the 10 day MVA (61), but as we are coming right up to the split we will also watch for a stronger move from here. Target: 70.
BUY POINT: From here: 64.05 on increased volume. Stop: 60. If we get a bit more of a pullback to the 10 day, a move back up from there on above average volume. Stop: 58.
POSITION: Stock only.

SIB (Staten Island Bancorp--$30.98; +0.95; optionable): Splits 2:1 effective 11-20-01.
http://biz.yahoo.com/p/s/sib.html
STATUS: Weak breakout. SIB looked like it was trying to move back in a handle to its cup (dating back to August and highs of 35). However, after several dojis on low volume over its 10 day MVA (29.87), SIB made the breakout move today, but volume continued to be low, at 43,100 (average 128,500). Pre-splits can often move without volume, but in patterns we still note that weak breakout moves can lead to pullbacks. For any existing positions, we are carefully protecting profits, watching for a possible test back. The split is next week, so we are also keeping our eyes open for a possible stronger move. Target: 36.
PLAY: After a dip back on continued low volume, holding support at the 10 day MVA, a move back up on volume of 150,000, with stock. Stop: 28.75. A play from here is aggressive, and we would look for volume of 150,000 on a continued run as well.

End Part 3 of 4

stock watch
stock split