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Begin part 3 of 3
THE PLAYS:
Good movers: BRCM; CEL; CNI; NVDA; TKC; TRID
New Pre-Split Plays:
Play Date: 02/16/2006
QLGC (Qlogic--$39.95; +1.27; optionable): Semiconductor and board level I/O products. Splits 2:1 on 3-3-06
http://biz.yahoo.com/p/q/qlgc.html
After Hours: $39.92
STATUS: Test 18 day EMA. Came right back from the Wednesday drop. QLGC broke out from a 12 month double bottom base in mid-January and ran higher through last week. It got the dips and then tumbled this week, falling below the 18 day EMA (39.30) Wednesday. It turned right back up Thursday, retaking that level on lower but still strong, above average volume. Strong money flow is leading higher, and we are looking for QLGC to hold this near support and resume the rally.
Volume: 3.005M Avg Volume: 1.819M
BUY POINT: $40.25 Volume=2.2M Target=$46.35 Stop=$38.95
POSITION: QLC GH - July $40c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/qlgc.html
Play Date: 02/16/2006
PD (Phelps Dodge--$144.46; +0.98; optionable): Copper. Splits 2:1 on 3-13-06
http://biz.yahoo.com/p/p/pd.html
STATUS: Test 50 day EMA (142.61). PD has been a leader but it has fallen on rougher times the past 7 weeks, testing the 50 day EMA in mid-January, bouncing hard, and then a thud down to the 50 day EMA again this week. This follows a huge run where it more than tripled so it was a bit winded. It has held the 50 day all week. We are looking for a spurt higher ahead of the split to make us some money; stocks are often volatile after a split announcement and with PD holding the 50 day EMA, if we see a strong volume move up off that level we want to grab some of the move. When that move stalls we will take it off the table. Nice thing is, when PD starts to run it really tears off bit chunks of real estate at a time.
Volume: 3.128M Avg Volume: 2.845M
BUY POINT: $146.95 Volume=4.3M Target=$160 Stop=$139.85
POSITION: PD DI - Apr. $145c (56 delta)
http://www.investmenthouse.com/cs/pd.html
New buy point on a current position:
Play Date: 02/16/2006
CELG (Celgene--$70.41; +0.74; optionable): Drugs. Splits 2:1 on 2-27-06
http://biz.yahoo.com/p/c/celg.html
After Hours: $70.50
STATUS: Test 18 day EMA. Has formed something of a short 7 week cup with handle over the 18 day EMA (69.21) following a high volume surge in late December and early January. Very, very quiet trade the past three weeks as it formed the handle. Money flow remains strong. It has simply gone about its business during all of the chop and selling, forming this base. All of this quiet action is leading up to a break higher toward the split.
Volume: 1.565M Avg Volume: 2.356M
BUY POINT: $70.88 Volume=3M Target=$71 Stop=$68.89
POSITION: LQH GN - July $70c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/celg.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: 02/11/2006
GME (Gamestop--$41.7; +1.07; optionable): Electronic games stores
http://biz.yahoo.com/p/g/gme.html
After Hours: $41.71
STATUS: Breakout test. Just looking for some more volume here as GME tapped the 18 day EMA (40.37) on the low and rebounded to post a solid gain. Looks ready. To recap: GME broke higher in January out of a 7 month base that formed after a strong run the first half of 2005. This base has allowed it to consolidate that move and set up for the next run. The mid-January breakout took GME to 43.50 on the run and then it made a nice, orderly and low volume pullback to test that move last week, holding the 18 day. In short, it used the selling to test the move, but there was no dumping the stock as volume was quite low. Strong money flow continues to lead higher. Relative strength broke out on the move, a very bullish indication. Looking for a bounce off this near support on a good return of volume to enter the play.
Volume: 976.2K Avg Volume: 1.697M
BUY POINT: New: $42.05 (orig. $41.11) Volume=2M Target=$48.95 Stop=$39.89
POSITION: GME GH - July $40c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/gme.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.
ANF: Potentially forecast for May.
BIO: Forecast 2-16-06. No split announcement Thursday. Looking at 2-22 with earnings.
CNQ: Forecast 2-23-06
CTSH: Researching the next possible date but enjoying the gains.
DAKT: Forecast 2-15-06. No announcement but a nice run back through the 50 day EMA to a new all-time high.
DBRN: Researching to pinpoint the next date.
DRI: Forecast third week in March.
FTO: Forecast mid-April. Gapped lower through the 50 day EMA but trying to retake it. Will have to form up a bit more.
GS: Researching exact date.
GVA: Forecast 2-15-06. Strong earnings and gapped higher.
IRM: Forecast 3-1-06
ITG: Researching the date.
JEC: No split announced last week but just letting it consolidate the gain while it moves laterally.
LM: Researching to pinpoint a date.
MRVL: Forecast 2-23-06
NOV: Forecast 2-24-06. Not looking so great but did hold some support at 60. Will see how it reacts over the next couple of sessions to see if it sets up for us.
ODP: Forecast 2-23-06
PNRA: Researching next date.
POOL: Researching to pinpoint a date.
RARE: Researching to pinpoint the date.
RJF: No split last week but blitzing higher. Researching the next date.
TLM: Forecast 3-1-06
New Pre-Announcement Plays:
Play Date: 02/16/2006
GGG (Graco--$40.68; +0.24; optionable): Fluid management systems. Forecast to potentially announce a split Friday, 2-17-06
BACKGROUND: Last announced a 3:2 split 2-20-04 at 41.70.
http://biz.yahoo.com/p/g/ggg.html
STATUS: Double bottom w/handle breakout. Got some info on GGG about a possible split announcement Friday. GGG is also in a good pattern, breaking out from a 9 month base in early January and has made a couple of bounces off the 18 day EMA (39.53). It has rallied up off that level this week but volume has remained low, and it is moving a bit of momentum with a close off the high Thursday. It can announce during the session or after; it has done both. If we get a test back early Friday we will start a partial position and see if we get the announcement; that should send GGG to another new high. Then we will see what other entry point we can get on this leader when it tests.
Volume: 215.7K Avg Volume: 316.14K
BUY POINT: $41 Volume=350K Target=$47 Stop=$39.53
POSITION: GGG EH - May $40c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/ggg.html
Play Date: 02/16/2006
LRCX (Lam Research--$46.19; -1.55; optionable): Chip equipment. Did not announce with earnings on 1-19-06, but hearing of a split in the works.
BACKGROUND: Split 3:1 1-24-00 at $138.
http://biz.yahoo.com/p/l/lrcx.html
After Hours: $46.20
STATUS: Flying plateau. Big move higher mid-January on earnings, propelling LRCX to 48. It has moved laterally the past three weeks, holding above the 18 day EMA (45.71) as it works to consolidate the move and set up the next run higher. Very solid action to hold the gains in the choppy to weak market. Gapped higher Thursday on the AMAT earnings but gave it all back and more. May need a few more days to work out the kinks, but like the action we are seeing.
Volume: 4.294M Avg Volume: 2.673M
BUY POINT: $48.12 Volume=4M Target=$57 Stop=$45.65
POSITION: LMQ FI - June $45c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/lrcx.html
Continuing Pre-Announcement Plays:
Play Date: 02/04/2006
PNRA (Panera Bread--$72.01; -0.17; optionable): Restaurants. No split announced on 2-9-06
BACKGROUND: Announced its only 2:1 split on 4-10-02 at $62.00
http://biz.yahoo.com/p/p/pnra.html
After Hours: $71.97
STATUS: Cup w/handle. Tried the breakout move last Friday after earnings, but the move sputtered. Indeed, it has worked to form a better pattern, pulling back the last two sessions on lower, below average volume, forming a handle to its 9 week base formed above the 50 day EMA (67.99). This is great action, shaking out the last sellers and setting it up for a strong break higher. Strong money flow is leading the stock higher.
Volume: 490.935K Avg Volume: 565.425K
BUY POINT: $72.55 Volume=801K Target=$83.25 Stop=$70.35
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--$51.59; -0.44; optionable): Chip equipment. Splits 3:2 on 3-1-06
http://biz.yahoo.com/p/v/vsea.html
STATUS: Test 18 day EMA. Volume was up Thursday as VSEA tested lower below the 18 day EMA (51.00) but recovered to close right on the 10 day EMA. Nice shakeout move on the AMAT earnings, and VSEA still looks super to start a run into its split. To recap: VSEA has hung in very well in the recent selling, making a low volume fade to the 18 day EMA (50.93), not giving up its uptrend that started after the early January breakout from its 4.5 month reverse head and shoulders base. Very solid. The split coming up on March 1 (3:2) does not hurt.
Volume: 916.155K Avg Volume: 747.078K
BUY POINT: New: $52.12 (orig. $51.12) Volume=1.4M Target=$59.78 Stop=$49.65
POSITION: UES EJ - May $50c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/vsea.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 02/11/2006
COH (Coach--$36.08; +0.63; optionable): Handbags, accessories
http://biz.yahoo.com/p/c/coh.html
STATUS: Double bottom w/handle. Got some volume Tuesday and Wednesday as it came off the 50 day EMA (34.66), but lost it Thursday as it continued higher. Showing good action, however, and looking for more volume as COH moves through the buy point. To recap: COH has formed an 11 week base over the 200 day SMA (33.13) as part of a larger 7.5 month ascending triangle base. Solid accumulation in the current pattern, showing net buyers and setting up the breakout. COH has formed a nice handle to the base the past week, using the market selling to make a low volume pullback to test. Nice money flow to go along with the accumulation. Ready to move to a new all-time high after this handle completes.
Volume: 1.473M Avg Volume: 2.768M
BUY POINT: $36.88 Volume=4.1M Target=$42.95 Stop=$35.15
POSITION: COH EG - May $35c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/coh.html
Play Date: 02/15/2006
USPI (United Surgical--$38.28; -0.66; optionable): Short stay surgical facilities
http://biz.yahoo.com/p/u/uspi.html
STATUS: Reverse head and shoulders. USPI dumped back down to the 10 day EMA (38.09) on rising but still below average volume Thursday. It remains in the pattern; need to see strong upside volume on the move through the buy point. To recap: Low volume the past two weeks as USPI forms the right shoulder to this accumulation pattern. Nice base that has formed just below a new all-time high. Solid leader that split in July and then carved out this base. This gives it the foundation it needs for the next run higher.
Volume: 438.089K Avg Volume: 525.626K
BUY POINT: $39.87 Volume=788K Target=$47.85 Stop=$37.96
POSITION: QPJ HH - Aug. $40c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/uspi.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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