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us stock market, stock watch
Begin Part 2 of 4
ABOUT THE REPORT: In response to member requests, we have changed the appearance of the report to make it easier to keep track of your favorite plays! First, we are adding new section of "Market Favorites," which are widely-traded stocks that are popular with our members. That will debut this weekend. Second, we will continue to feature our daily "Bonus Plays" and "Best Plays," but we are presenting the remaining plays in a different fashion. They are still arranged according to position in the split cycle (Pre-Announcement, Pre-Split, Continuing Candidate and Post-Split), and we will continue to prepare full descriptions of those stocks making significant moves or that are in solid patterns and ready to make good moves. Other stocks, such as those that have momentarily fallen out of a pattern or which need to pull back after a move, we will include on a watch list (again, broken down by section), providing a brief description of what occurred that session and what to anticipate. When they 'get right,' we will provide a full write up.
THE PLAYS: Some solid moves, including a big breakout from WFMI, a breakout by ACS, and a hard drop through the buy point by EASI.
Remember in this market that targets, although set at generally conservative levels, are 'loose' and we are watching for topping signs on moves that would point to our taking profits. We will continue to point out those topping signs as we see them, and let you know when we are contemplating taking profits. The stops are initial stops that we place within 7% of the buy point, typically below support. In this market we are moving up the stops to protect profits as we realize gains.
BONUS PLAYS:
QLGC (Qlogic--$47.77; +0.47; optionable): Semiconductor
http://biz.yahoo.com/p/q/qlgc.html
STATUS: QLGC has formed an ascending wedge above support of the 10 day MVA (45.70), with highs hitting resistance (in the last 2 peaks of the pattern) at 49.16. Volume has been falling off below average, appropriate for the consolidation and down to 9.6 million (avg. 10.5 million). Thursday QLGC tapped the lower support and made a small move up, though volume was down. We are looking for a strong move back up and over the upper resistance for a breakout from the pattern, though QLGC may use another day or two of consolidation at the moving average. Showing strong money flow. Target: 59
BUY POINT: Breakout: 49.29 on volume of 14 million or higher. Stop: 45.84 (7%)
POSITION: Stock and/or January $40 calls to buy (QLC AH).
BRCD (Brocade--$29.98; +0.17; optionable): Computer Periperals
http://biz.yahoo.com/p/b/brcd.html
STATUS: Looks nice in this gradually descending lateral pattern that is currently holding support at the 10 day MVA (29.13), the handle to a 3-month cup. Volume has fallen satisfactorily over the last three days, down Thursday to 13.1 million (avg. 16.1 million). We look for the stock to hold here for a rally back up to the 200 day MVA at 35, but our target on a breakout is at 38. The November high is 32.04, so we will look at taking positions on a strong move over that price; aggressive players can look at a move over 31 on average or better volume.
BUY POINT: Breakout: 32.17 on volume of 24 million or higher. Stop: 29.92 (7%)
POSITION: Stock and/or December $25 calls to buy (UBF AE).
WSTLA (Wet Seal--$21.00; +1.00; no options): Retail
http://biz.yahoo.com/p/w/wtsla.html
STATUS: Moving up in a pattern that resembles an ascending wedge with a stray high above the most consistent resistance at the 21.25 range (actual high in the pattern is at 22.20). Volume was high as the stock popped up from the 50 day MVA at the low of 19.60 (460,300; avg. 270,000). This pattern formed in the mid-range of the right side of WTSLA's 6-month cup base. Looking for the breakout; earnings are out Tuesday after the bell. The stock shows good money flow and buying. Target: 27 (previous high in the base is 25.67)
BUY POINT: 22.33 on continued strong volume (minimum breakout volume is 365,000). Stop: 20.77 (7%); 18 day MVA is at 20.40.
POSITION: Stock.
GIS (General Mills--$49.50; -0.51; optionable): Food & Beverage
http://biz.yahoo.com/p/g/gis.html
STATUS: The stock had a good breakout early this month, running to a high at 51.16 until selling back a few points to test support at the 10 day MVA (currently at 48.98). Volume has been below average for the last three days, decreasing nicely in the pullback, with price working its way up the 10 day in a gradual fashion. Thursday the stock showed a doji to close near the intraday low of 49.43 (high is 50.30) on just a slight rise in volume to 1.8 million (avg. 2 million). We are looking for a move up from support and new breakout over the high, as stocks often post nice gains after testing breakouts. GIS has strong money flow and super buying. Target: 59
BUY POINT: Aggressive: 50.40 on 2 million or higher volume. Stop: 46.87 (7%); 50 day MVA is at 45.96. Breakout: 51.20 on volume of 2 million or higher. Stop: 47.62 (7%); 18 day MVA is at 47.93.
POSITION: Stock and/or January $45 calls to buy (GIS AI).
DJX (1/100 Dj Indu--$98.72; +0.48; optionable):
STATUS: The index got stronger, still above average volume Thursday, but made only a small move up, showing another loose doji (same as Wednesday as volume broke above average levels). Looks ready for a pullback, so we are looking at a target at 95, the 50 day MVA. The index may test up to 99.50 to 100 before heading back down, due to the stronger volume today, but is ready for a pullback.
BUY POINT: 98, preferably on rising volume.
POSITION: December $102 or $100 puts to buy (DJV XX or XV).
PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: No announcement from PEP, but we are still looking at FLO for tomorrow.PEP is forecast for Thursday.
BEST PLAYS: Besides the plays set forth below as best plays, there are some other stocks that also look good. These include Past Split LUV; Pre-Splits KRON and ITG; Continuing Candidates APPB and CBH; and Post-Split JNC.
PRE-ANNOUNCEMENT BEST PLAYS
1) FLO - Still poised to spring with an announcement
2) MI - Could be forming an ascending wedge in the handle
3) TRDO - Still a put play
4) EASI - Hard drop and more to go
FLO (Flowers Foods--$41.91; -0.09: optionable): Food & beverage. Forecast to announce a split on 11-16-01 in conjunction with a board meeting. The company will not confirm this date, but based upon our research this is the date for the next board meeting.
http://biz.yahoo.com/p/f/flo.html
BACKGROUND: FLO last split in May 1997 at a price of $25. The annual shareholder meeting was on 5-31-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Still poised over support. Looking at an announcement with a board meeting Friday, and FLO has been holding fast over its 10 day MVA (41.54, with August-September highs) the past week after pulling back from its high at 43.44. Today the stock reached over our buy point, hitting a high of 42.45, but volume continued to drop, coming in weak at 28,900 (average 71,000) as FLO showed a doji. We could see a test of the 10 day again, but we are still looking for a strong move up, and an announcement would help push the stock up to its recent high and beyond. Target: 50.
BUY POINT: From here or after a test of the 10 day, 42.50 on increased volume near the average. Stop: 40.
POSITION: Stock and/or January $40 calls to buy (FLO AH).
MI (Marshall & Ilsley--$60.99; -0.03; optionable): Banking: Regional. We are researching a forecast date.
http://biz.yahoo.com/p/m/mi.html
BACKGROUND: Based upon our research it does not appear that MI has ever split its stock. The annual shareholder meeting was on 4-24-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Still testing the breakout. MI made a nice breakout move last week from a large 'flying W' with handle pattern, but it pulled back to test the breakout. The stock has moved back up the last few days, reaching up highs of 61.49 the last two sessions, today showing a doji on lower volume (208,200; average 227,400). Off of this pattern we could see a test back to support at the 10 day MVA (60.31), but that would be fine as MI would be forming an ascending wedge pattern. Still strong, and after the test we will look for another strong breakout. Still targeting 70.
BUY POINT: 61.61 on above average volume. Stop: 57.25 (50 day MVA at 57.58).
POSITION: Stock and/or December $55 calls to buy (MI LK).
TRDO (Intrado--$25.51; +0.56; optionable): Computer Software. Forecast to announce a split in the beginning of December in conjunction with a board meeting. The company will not confirm the board meeting but based upon our research the board meeting should take place at this time.
http://biz.yahoo.com/p/t/trdo.html
BACKGROUND: Based upon our research it does not appear that TRDO has ever split its stock. The annual shareholder meeting was on 6-26-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Gave up support. TRDO dropped through its 50 day MVA (27) on very strong volume Wednesday, and we were looking for a bounce to test the 50 day and set up a put. Today we got that move, as TRDO gapped down but then made a move back up on sharply reduced volume of 482,400 (average 329,000). We will see if it can muster anything more to the upside, but we are looking for a failure at the 26-27 range, and on a move back down on strong volume, we will look at the put. Targeting recent lows near 20, although we will see how it reacts to today's low at 23.57. The 200 day MVA is at 16.27.
BUY POINT: After a failed move up, on a move below 24.50 on continued strong volume.
POSITION: December $30 puts to buy (UNC XF).
EASI (Engineered Support--$38.97; -4.04; optionable): Aerospace/Defense. Forecast to announce a split on 12-10-01 in conjunction with earnings. At this time, the company cannot confirm this date.
http://biz.yahoo.com/p/e/easi.html
BACKGROUND: EASI last announced a 5:4 split on 2-1-2001 with a board meeting at a price of $28.50. Before that it announced on 6-12-98 at a price of $26.50. The company has sufficient shares for a 3:2 split.
STATUS: Falling hard. After giving up its 50 day MVA (45.86) Tuesday, we have seen some solid selling down, today intensifying as it hit our put buy point with increased volume of 537,300 (average 462,000). A good start to the play, and given that we have a substantial bit of room down to the target, and the momentum is strong, we can look at new or additional positions on a continued drop. However, after such a fall we will typically see a relief bounce at some point, and we will look for it here, picking up positions on a continued fall back. Targeting the 200 day MVA, at 34.76.
BUY POINT: After a relief bounce that takes EASI back to 40-41, a drop back through 39.50 on increased volume.
POSITION: December $45 puts to buy (UFE XI).
PRE-SPLITS BEST PLAYS: Remember, we try to grab these as they break out of good patterns or as they start a run right before the split. Not looking for home runs, but looking for those $3 to $4 moves running into the split, watching for topping signs and potential resistance. Not huge money, but it can be very steady. We set our initial stops at the 7-8% range below the purchase price (or just below obvious support), and move them up on a move to preserve our profits.
1) PSC - Continues to consolidate
2) BRO - Has formed a pennant
PSC (Philadelphia Suburban--$29.15; -0.12; no options): Water utility. Splits 5:4 effective 12-3-01.
http://biz.yahoo.com/p/p/psc.html
STATUS: Continues to consolidate. PCS could be ready for another move, now that it has pulled laterally over its 10 day MVA (28.98) for the last week, testing the breakout from its cup with handle/ascending wedge pattern. We got a volume spike Tuesday as the stock made a small move up, and volume has decreased markedly (53,200 today; average 80,800) as the stock has pulled back slightly the last two sessions. Good action, and we will see if it can spring from support and take out the consolidation high. As it makes its move we are watching the recent (mid-October) intraday spike at 30.80, but if it can make it past that level, we are targeting 34.
PLAY: A buy point of 29.75 on above average volume, stock only. Stop: 28.50 (18 day MVA at 28.69; 50 day MVA at 27.87).
BRO (Brown&Brown--$58.85; +0.42; no options): Insurance Brokers. Splits 2:1 effective 11-21-01.
http://biz.yahoo.com/p/b/bro.html
STATUS: Continues to hold support in the lower part of its pattern. BRO has been on a solid run, and is now in a small rolling consolidation that has shaped up into something of a pennant. We were looking for the stock make a strong roll back up in the pattern as it showed three consecutive dojis the past week, but it has managed only a slight move up as volume remains low (101,300 today; average 142,000). We have a bit of time before the split, so we will see if BRO can find some more strength and break over the recent highs. Initial target 66, but we will watch for topping signs (recent high from an intraday spike at 62.20) as pre-splits can be volatile.
PLAY: 60.37 on volume of 180,000. Stop: 57.50. Stock only.
CONTINUING CANDIDATE BEST PLAYS:
1) SUI - A bit of shake-out
SUI (Sun Communities--$37.65; -0.28; no options): REIT. http://biz.yahoo.com/p/s/sui.html
BACKGROUND: Based upon our research it does not appear that SUI has ever split its stock. 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: A bit of selling in the pennant handle. SUI has been pulling back nicely since making a strong move up in the right side of a small "flying w" pattern, and the handle had formed into a pennant. Today we saw some of the strong selling we talked about yesterday, selling which took the stock through the 10 day MVA (37.79) and down to the 18 day (37.67), on increased volume of 53,200 (average 47,600). While higher volume selling is typically a concern, with pennants you can sometimes see this type of drop and it is simply the precursor to a strong breakout move. We will watch and see. Target 45.
BUY POINT: New high: 38.37 on increased volume, with stock. Stop: 37.
POST-SPLITS BEST PLAYS:
1) PDLI - Shaping up nicely
2) RMCI - Looking for a successful test
3) ATK - A put
PDLI (Protein Design Labs--$36.23; +0.18; optionable): Biotechnology. Splits 2:1 effective October 12.
http://biz.yahoo.com/p/p/pdli.html
STATUS: PDLI is setting up nicely. It has made some solid moves lately, pulling back to support and taking off again. It is forming an ascending wedge now, having pulled back Wednesday but caught support at its 10 day MVA (35.17). This pattern is making up the handle to a cup dating back to June with highs at 45, although this cup is part of a larger overall pattern that goes back to levels over 70 a year ago. However, even though deep in the pattern, PDLI is giving us many playable moves. We will watch for it to hold the 10 day, or at least the 18 day (33.99) from here, and give us a move back over the recent highs, at 37.50. Target: 45.
PLAY: Breakout: 37.62 on volume of 3 million (2.2 million average, way down to 1.24 million today). Stop: 35.50. If we get a move down to the 18 day on low volume, we can look at playing a move back up, with the buy point on a move over 35 on average or better volume. Stop: 33.75. For both buy points, stock and/or December or February $30 calls to buy (PQI KF or PQI BF). Stop: 35.50.
RMCI (Right Mgmt--$25.53; -0.55; no options): Business services. Split 3:2 effective 11-2-01.
http://biz.yahoo.com/p/r/rmci.html
STATUS: RMCI gave us a great move up, running from its 50 day MVA (21.05) and then breaking out over the top of its recent rolling range. After Tuesday's strong move, RMCI showed a topping sign by gapping up and reversing on strong volume, but the strong selling did not continue, and today RMCI showed a loose doji as volume fell dramatically (128,700; average 169,000). It is holding over the high in the ragne at 24.97 (low today 25.53), and although we are not looking for an immediate move back up, we will see if RMCI can hold the highs in the pattern, resting and setting up for another good move up.
PLAY: After lower volume test of 25 that holds, a move back over 26.50 on increased, above average volume. Stock only. Stop: 24.75.
ATK (Alliant Techsystems--$75.24; -2.57; optionable): Aerospace/Defense. Split 3:2 effective 9-10-01.
http://biz.yahoo.com/p/a/atk.html
STATUS: Another defense issue showing a lot of weakness now. ATK had given us a great run, but has fallen back, at first on low volume, but Tuesday it gave up the 50 day MVA (81.93) on big volume. We looked for a bounce after the initial drop and got a small one Wednesday, and the stock dropped back a bit again today, although volume continued to drop (441,300; average 337,300). ATK could again try a weak move up, but from either here or after a little bounce we will look for a move down through the low of the last two sessions, at 74.50. Targeting 70 initially (August-September consolidation levels), with the 200 day at 66.24.
PLAY: From here or after a weak bounce, a drop below 74.50 on increased volume, with stock and/or December $85 puts to buy (ATK XQ).
* * *
REMAINING PLAYS:
PRE-ANNOUNCEMENTS REMAINING PLAYS:
Watchlist:
GTK (45.38; +0.25): Continues to crawl up on lower volume. Still looking for GTK to hold support (10 day MVA at 43.82) and consolidate its gains before we look at new positions.
XL ($91.00; +0.44): Has tried to recover, but volume dropped significantly and it is still under the resistance of its short-term MVA's (91.85). We will see if it can form up in a better pattern.
SONC ($31.80; +0.25): SONC continues to struggle with its 50 day MVA (31.56) climbing back over today with unimpressive volume (241,400; average 243,000). Looks weak, and we could still see the put develop.
NDN ($34.33; -0.02): Has fought back over the 50 day MVA (33.33), but is not showing much promise to the upside or the downside at the moment.
Plays:
EDS (Electronic Data System--$68.71; +0.21; 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: A bit erratic now. EDS has ranged between 53-67 since the beginning of the year, rallying back since the attacks from the 54 range. Earlier this month EDS broke back over the prior high for the year (67.40, from March), but after holding the 10 day MVA (67.16) on a breakout test, EDS has moved back up but is showing some erratic movement on low volume. At its low Wednesday it tested the 10 day, but today hit up to 69.88 before pulling well back to close. Volume was up but still weak at 2.82 million (average 3.17 million). Off of this pattern we will see if we get another test of support, and possibly a test lower to the range of the 18 day MVA (65.73). With current positions we will continue to cautiously ride, but breach of the 10 day could spell an exit.
BUY POINT: After a test of the 66-67 range with a bit of consolidation, a move back over 68 on above average volume. Stop: 64.
POSITION: Stock and/or January $65 calls to buy (EDS AM).
End Part 2 of 4
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us stock market
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