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Begin part 3 of 3
THE PLAYS:
Good movers: PD; WFT
New Pre-Split Plays:
Play Date: 02/21/2006
SLB (Schlumberger--$118.51; +4.03; optionable): Oil and gas services company. Splits 2:1 on 4-10-06
http://biz.yahoo.com/p/s/slb.html
After Hours: $118.58
STATUS: Test 50 day EMA (111.53). After a nasty drop this month, SLB jumped off the 50 day EMA Tuesday after three days at that level. Taking another run at it though energy is all over the map right now; SLB has a lot of institutional support and it showed as volume jumped at the 50 day EMA. Would like to see a little more volume as it moves higher. A move to the target lands us a 70%ish gain.
Volume: 6.993M Avg Volume: 5.977M
BUY POINT: $120.11 Volume=8M Target=$130 Stop=$116.95
POSITION: SLB ED - May $120c (53 delta)
http://www.investmenthouse.com/cs/slb.html
New Post-Split Plays:
Play Date: 02/21/2006
BRO (Brown & Brown--$30.76; -0.65; optionable): Insurance brokers
http://biz.yahoo.com/p/b/bro.html
STATUS: Double bottom w/handle. Solid surge last week as BRO broke out over the hump in the 8 week pattern (at 29.47) and rallied higher on strong upside volume. Tuesday it faded back on low, below average volume, and it looks as if BRO is going to form a second handle to the base right at the high on the left side of the base. Positive 2 to 1 accumulation in the base shows net buying, setting up BRO for the breakout to a new high once more. Likely to take another couple of sessions to finish forming the handle, and then looking for a high volume breakout when the move resumes.
Volume: 260.4K Avg Volume: 538.744K
BUY POINT: $31.75 Volume=808K Target=$37.95 Stop=$30
POSITION: BRO FF - June $30c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/bro.html
Play Date: 02/21/2006
RMD (Resmed--$41.41; -0.46; optionable): Medical appliances
http://biz.yahoo.com/p/r/rmd.html
STATUS: Cup w/handle. Low volume the past two weeks as RMD makes the test of the 10 day EMA (41.35), forming the handle to its 13 week base that sets RMD for the breakout to a new all-time high. Positive 3 to 2 accumulation in the base (3 up price weeks on rising volume to 2 down price weeks on rising volume) shows net buying along with strong money flow leading higher ahead of price. Nice test and looking for volume to come back in as RMD makes the break higher. Solid market leader with great fundamentals to go with the pattern.
Volume: 411.2K Avg Volume: 497.727K
BUY POINT: $43.11 Volume=747K Target=$51 Stop=$41
POSITION: RMD GH - July $40c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/rmd.html
Play Date: 02/21/2006
TALX (Talx Corp.--$32.04; +0.7; optionable): Automated employment and income verification
http://biz.yahoo.com/p/t/talx.html
STATUS: Test 50 day EMA. Nice breakout and run in late 2005 led into the January split. After that move and the split TALX needed a breather, and it slipped into the current 6 week pullback. It undercut the 50 day EMA (30.71) for two sessions in early February, but jumped right back above that level and continued working laterally above support at 30 along with the 50 day. Volume picked up Tuesday, approaching average, as TALX started higher. Looking for more trade as it moves through some resistance at the 32.50 level.
Volume: 354.993K Avg Volume: 485.711K
BUY POINT: $32.62 Volume=729K Target=$39 Stop=$31.04
POSITION: TUA FX - June $33.375c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/talx.html
New buy point on current position:
Play Date: 02/21/2006
HOLX (Hologic--$50.99; -0.72; optionable): Medical appliances
http://biz.yahoo.com/p/h/holx.html
After Hours: $50.80
STATUS: Flying plateau. Nice low volume on the lateral move this month, allowing HOLX to consolidate the strong January move yet refusing to give up any ground. That is a sign of strength and investors not wanting to give up any shares. HOLX has run well for us and has run a long way, one of the stronger performers in 2005. This consolidation is giving a breather for another leg higher. Volume has started higher the past three sessions, indicating it is ready to try that move. Want to see strong trade as it moves through the buy point. Money flow is leading higher and accumulation in the 4 week lateral move is a solid 2 to 0 (2 up price weeks on rising volume to 0 down price weeks on rising volume). That sets it up for the move; now it just has to show it.
Volume: 563.4K Avg Volume: 857.532K
BUY POINT: $52.38 Volume=1.1M Target=$62 Stop=$49.54
POSITION: QHX FJ - June $55c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/holx.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: 02/18/2006
RSTI (Rofin-Sinar Tech--$50.76; -0.05; optionable): Laser-based products
http://biz.yahoo.com/p/r/rsti.html
STATUS: Flying plateau. After the strong Friday move RSTI tapped lower Tuesday and then recovered to close flat. Tested lower and then rebounded to close flat. Good shakeout move and looks ready to continue higher. To recap: RSTI jumped out of a 7 week base in late January and rallied to 52. It slipped into the current 3 week lateral move to consolidate the break higher, moving laterally on much lower, below average volume as the 10 day EMA (49.56) rose up to meet it. Friday that was enough to start it back up as RSTI rallied out of the consolidation on very strong volume. Looks ready to continue its run. Top rated stock on all counts.
Volume: 136.049K Avg Volume: 115.903K
BUY POINT: $51.05 Volume=173K Target=$58.95 Stop=$48.55
POSITION: QRT FJ - June $50c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/rsti.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 2-22 with earnings.
CNQ: Forecast 2-23-06
CTSH: Researching the next possible date but enjoying the gains.
DBRN: Researching to pinpoint the next date.
DRI: Forecast third week in March.
GS: Researching exact date.
GVA: Forecast 2-15-06. Strong earnings and gapped higher.
IRM: Forecast 3-1-06
ITG: Forecast first week of March.
JEC: Did not announce in January. Still in a nice consolidation, setting up the next move.
LM: Researching to pinpoint a date. Right now it looks like late April.
LRCX: Researching the exact date.
MRVL: Forecast 2-23-06
NOV: Forecast 2-24-06. Still not in a position we want to buy into. Will see how it sets up early this week.
ODP: Forecast 2-23-06
PNRA: Forecast 4-12-06
POOL: No announcement with earnings on 2-16-06.
RARE: Researching to pinpoint the date.
RJF: No split announced, but letting it ride higher for us in the current uptrend.
TLM: Forecast 3-1-06. Will need to set back up for us.
New Pre-Announcement Plays:
Play Date: 02/21/2006
DBRN (Dress Barn--$43.35; -0.09; optionable): Apparel stores.
http://biz.yahoo.com/p/d/dbrn.html
BACKGROUND: Last split 2:1 on 5-2-02 at $31.
STATUS: Flying plateau. DBRN is working laterally above support at 42.50, consolidating the November breakout and run higher out of a 16 week base. Strong mover for us that started to weaken last week but never gave in. Volume has remained low and below average on the lateral move. Strong money flow remains as well. Volume was up some Tuesday, and looking for more volume as DBRN moves through the 10 day EMA (43.96). If it shows us strong trade we will start the play there. If not we will wait for a break over 45 on strong trade in order to clear some interim resistance.
Volume: 514.672K Avg Volume: 822.039K
BUY POINT: $44.11 Volume=1.2M Target=$52.95 Stop=$42.55
POSITION: DTQ FI - June $45c (52 delta) &/or Stock
http://www.investmenthouse.com/cs/dbrn.html
Continuing Pre-Announcement Plays:
Play Date: 02/18/2006
NX (Quanex--$63.76; +1.46; optionable): Engineered carbon & allow steel, flat rolled aluminum products, precision formed wood and metal products. Forecast to announce a split 2-23-06
BACKGROUND: Last announced a 3:2 split 12-2-05 at $58.90.
http://biz.yahoo.com/p/n/nx.html
STATUS: Reverse head and shoulders. Picked up some volume late, but it still was not enough to push NX trade above average. Nice price move and second solid volume session in 3. If it can continue the move Wednesday we will start a partial position and see of more volume develops. Then we will look for a test and buy more as it rebounds from that pullback. To recap: NX pre-announced some strong Q1 earnings in mid-January and gapped higher, completing the 'head' to its pattern. It then spent the past three weeks testing that move, forming the right shoulder to its 19 week base. Excellent 6 to 2 accumulation shows plenty of buying during the consolidation. That sets the base for the breakout and run higher. Thursday and Friday it was moving, rallying to the neckline. Volume was mediocre. Still looking for that volume surge as it moves higher. Solid set up for the breakout, and timely as well given we are looking for the split announcement this week.
Volume: 349.9K Avg Volume: 384.444K
BUY POINT: New: $63.88 (orig. $63.48) Volume=569K Target=$73 Stop=$59.89
POSITION: NX HM - Aug. $65c (47 delta) or NX EL - May $60c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/nx.html
CONTINUING PRE-SPLIT PLAYS:
Play Date: 02/16/2006
CELG (Celgene--$70.05; -0.25; optionable): Drugs. Splits 2:1 on 2-27-06
http://biz.yahoo.com/p/c/celg.html
After Hours: $70.01
STATUS: Test 18 day EMA. Volume moved up to average Tuesday as it tested the 18 day EMA (69.40) and rebounded to close at the 10 day EMA (69.80). Like to see that volume starting higher on this shakeout and recovery. Looks ready to make the move. To recap: Has formed something of a short 7 week cup with handle over the 18 day EMA (69.40) 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: 2.28M Avg Volume: 2.375M
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
CONTINUING POST-SPLIT PLAYS:
Play Date: 02/18/2006
GPN (Global Payments--$49.74; -0.18; optionable): Payment systems
http://biz.yahoo.com/p/g/gpn.html
STATUS: Test 50 day EMA. Nice doji Tuesday at the 10 and 18 day EMA (49.38) as volume remained stronger and near average. Sure looks ready to give us the move. To recap: Market leader coming back to test the 50 day EMA (48.12) after a solid run from September to November, a short base, and another run from December through January. It ahs spent the past three weeks fading back to test that run, holding at the 50 day EMA and price support at 48 as well. Volume has started to pick back up on the upside sessions, and Friday was a very solid price/volume move. Money flow is solid and is leading higher. Looking for GPN to continue its rebound this week on continued strong volume.
Volume: 645.2K Avg Volume: 649.487K
BUY POINT: $50.35 Volume=1M Target=$57.95 Stop=$48.78
POSITION: GPN HJ - Aug. $50c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/gpn.html
Play Date: 02/18/2006
AMX (America Movil--$34.03; -0.29; optionable): Latin America wireless telecom services
After Hours: $35.25
http://biz.yahoo.com/p/a/amx.html
STATUS: Test 50 day EMA. Lower volume test of the 10 day EMA (33.68) Tuesday is forming a nice lateral handle to that short little double bottom. After hours it was jumping. Looks ready to move in after that pullback. To recap: AMX dipped to the 50 day EMA (32.01) and price support at 32 twice in February, setting up a very short attempt at a double bottom. AMX is trending higher and has done so for 2005. This little lateral jog this month is giving it a breather for the next leg higher. It rebounded off the 50 day last week but volume fell as it made its move. Friday it showed a doji on lower volume, and we anticipate it will slide laterally a couple more sessions and then be ready to vamanos. If it gaps higher we will look for an early test to hold and then move in to start the position.
Volume: 2.287M Avg Volume: 3.749M
BUY POINT: $34.68 Volume=5.6M Target=$40.95 Stop=$33.11
POSITION: AMX HG - Aug. $35c (49 delta) or AMX EF - May $30c (72 delta) &/or Stock
http://www.investmenthouse.com/cs/amx.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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