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us stock market, stock watch
Begin Part 3 of 4
FDC (First Data--$73.23; -0.77; 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 on weak volume Tuesday. After the unimpressive move, it has held on with decreasing volume (today 1.66 million; average 2 million). FDC had pulled into a brief handle over its 10 day MVA (71.88) 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. We will likely see a pullback from here, where we will watch for FDC to perhaps visit the 18 day (70.42) and form a better handle. However, we need to be prepared for a potential visit to the 50 day (67.23) 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. More likely will see a drop.
POSITION: Stock and/or February $70 calls to buy (FDC BN).
THQI (Thq Inc--$53.50; -0.46; 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) at the beginning of the month, but hit resistance at the up trendline connecting the August lows (and which provided resistance at the October high). After a strong drop back it has held at its short-term MVA's (10 & 18 day at 54.11 and 53.42, respectively), although volume was very heavy on a gap up and pullback Wednesday. THQI held on today with a doji at the 18 day, so we will see what it can do. If it can hang on to support (50 day MVA at 51.30), we could still get a move up in a rally, but that would be an aggressive play at this point. Targeting resistance on a move at 60.
BUY POINT: If it can hold the 52.50 range on lower volume, a move over 55.80 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:
LUV (18.50; +0.52): We have been taking a peek at LUV from time to time as it breaks resistance, and today it broke the 200 day MVA (17.92) with sharply higher volume (5.09 million; average 3.97 million). It pulled back off of its high at 18.85, so could test the 200 day again, which would be yet another solid buy point, with stock.
Plays:
SCHL (Scholastic Corp--$43.82; -2.07; optionable): Publishing.
http://biz.yahoo.com/p/s/schl.html
STATUS: SCHL was tightening in its handle consolidation (to a cup dating back to February), but after holding the short-term MVA's at 46 the stock took an abrupt drop today. It gave up that support and closed below the 50 day MVA (44.17), with volume a bit lower but still strong at 362,200 (average 234,000). We will see if SCHL makes a move back over the 50 day, but if it cannot hold we will look for a drop back through that level for a put play down to the 200 day MVA, at 41.76.
BUY POINT: After a failed move back over the 50 day, a drop through 43.75 on continued strong volume.
POSITION: December $55 puts to buy (USC XK - check open interest, price, delta, etc. with your broker as not available at the time of writing).
TARO (Taro Pharmaceuticals--$38.00; +0.45; optionable): Drugs.
http://biz.yahoo.com/p/t/taro.html
STATUS: Got the move down to trigger the put on Tuesday, but then reached all the way down to 34 on Wednesday before recovering to close, moving on strong volume. Volume dipped way back today (740,400; average 735,700) as TARO traded up near the 50 day MVA (39.92) and down to 36.55 before closing with a doji. With the erratic movement it is kind of a tough play, but the momentum is down and we are still holding positions we did not get out of on the move up Wednesday. We can look at new or additional positions if we get another test of the 50 day, followed by retreat on big volume. Target: Still 34, with that potential support at 36. The 200 day MVA is at 32.22.
BUY POINT: Test: After another failed attempt at the 50 day, a drop back below 38 on increased volume in the range of 1.4 million. From here: A drop through 36 on increased volume.
POSITION: Test: December $50 puts to buy (QTT XJ). From here: December $47.50 puts to buy (QTT XA).
PRE-SPLITS REMAINING PLAYS:
Watchlist:
PBG ($45.72; -1.45): Splits 2:1 effective 12-5-01. PBG did not give us the 50 day MVA (46.32) bounce, and gave up that support today on below average volume (594,300; average 735,700). Not looking like much from here, so we will see if it forms up.
EPIQ ($35.98; -1.87): Splits 3:2 effective December 1. Has gapped up and reversed three times now between modest moves. Looking for a move down to recent support (10 day at 34.46) where it can perhaps settle and give a pattern we can play back up with new positions.
FULL ($56.68; +0.88): Splits 2:1 effective 11-19-01. Coming up on the split, and we can still carefully ride FULL as it creeps up, but we are expecting a drop back to test the 55 range.
SIB ($30.67; 0.00): Splits 2:1 effective 11-20-01. Another one splitting soon, and it has not done much, slowly moving up in the right side of its cup on low volume. Still looking for a move back over 31 on volume of 150,000, with stock. Stop: 29.
Plays:
KRON (Kronos--$62.92; +0.98; 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 into a consolidation over the 10 day MVA (61.48). We did not get another strong pre-split move, but as KRON is in a pretty good pattern we will see if it can hold support and make a post-split move, which we have seen several times recently. Volume has been rather low (128,100 today; average 180,000), which is solid in this type of lateral pattern. Today we saw a doji after KRON tested the 10 day at its low. The pattern is tightening up, so if it can hold support through the split we could see KRON continue to show strength. Target: 70.
BUY POINT: From here: 64.05 on increased volume (we did see an intraday spike to 64.96 Wednesday). Stop: 60.
POSITION: Stock only.
MIKE (Michaels Stores--$58.46; -0.54; optionable): NEW INFORMATION: Splits 2:1 effective November 27.
http://biz.yahoo.com/p/m/mike.html
STATUS: MIKE has a new split date, but even so it looks like it is ready to test its most recent run. It has been relentless since the market re-open in September, making four distinct runs up. After the fourth run we are extremely careful, as stocks typically need to rest and drop back to a longer-term trendline or the 50 day MVA (which is way back at 47.60). Wednesday's move was quite strong, and today MIKE hit another new high at 59.83 but pulled back to close with a doji on lower, but still strong volume of 687,100 (average 491,000). That pattern, especially after this solid pre-split run from the 53 range, makes us prepared to exit short-term positions and see what MIKE does from here. It looks like it needs a rest.
PLAY: Looking for a potential drop to test support, and from there we will evaluate it again. Nothing new for Friday.
ITG (Investment Tech Group--$65.34; +0.19; optionable): Announced a 3:2 stock split Tuesday! It will be effective December 10.
http://biz.yahoo.com/p/i/itg.html
STATUS: Got the announcement this week. ITG continues to move in a lateral pattern over the short-term MVA's (10 & 18 day at 64.54 and 63.71, respectfully). However, it has pulled up slightly the last few sessions, showing loose dojis on continued below average volume (202,800; average 238,200). That kind of creep is not the best set-up for a breakout, although we can get a move from here. We can look for another test of the 64 level, and then a strong move back up for positions. High in the pattern is today's level at 66.15. Target: 75.
BUY POINT: From here or after a test of the 10 day, 66.27 on volume of 300,000. Stop: 62.50
POSITION: Stock and/or January $60 calls to buy (ITG AO).
CONTINUING CANDIDATES REMAINING PLAYS: When splits are not announced, we will keep the best split prospects on the report rather than continue to carry all of them in case there is a an unexpected announcement. We will continue to monitor the stocks that are trimmed and add them again when we ascertain a revised split announcement date.
Watchlist:
AZO ($66.50; -0.35): AZO closed with a small loss today, but is still holding in the range of the current highs. It may be moving into a lateral consolidation here, but we would still prefer to see a stable pullback and consolidation over support (10 day and 18 day at 64.38 and 62.24) before we consider new positions - AZO is still just too extended.
BJ ($49.92; -0.44): With the breach of the 200 day we saw earlier in the week, we were looking for a put play, but BJ has now pulled up to the convergence of the short-term & 50 day MVA's (50), today closing with a tight doji at that level as volume increased to 855,400 (average 762,800). It could go either way, and we will wait for more of pattern to set up from here.
STJ ($70.55; +0.96): Took a small bounce up from just below the 50 day MVA (69.88) today, but the slightly increased volume (547,300, average 622,100) wasn't enough to push it over the short-term MVA's (18 day at 71.11). Still looking for this support hold and will look at upside positions with stock and/or January $65 calls to buy (STJ AM) on a strong move over 71.50.
TECD ($42.78; -0.67): Still holding the 50 day MVA (41.65), showing erratic volume and movement, bouncing around between the 50 day and short-term MVA's (10 day at 43.67). Still looking for support to hold and still looking for a stronger bounce on increased, above average volume (up Thursday to 997,400, average 890,500), with the buy point on that move 44.75. Stock and/or December $40 calls to buy (TDQ LH).
THC ($57.95; +0.35): We were looking for stronger selling to resume to trigger a put play, but instead TCH gapped up over the 50 day MVA (57.51) Wednesday and held that support today as volume fell to 1.61 million (average 2.14 million). Not much of a pattern now; we will watch it to see what develops.
Plays:
ACS (Affiliated Computer--$95.84; +2.27; optionable (ACS): Information Software
http://biz.yahoo.com/p/a/acs.html
STATUS: Broke to a new high! ACS has made a very fine move for us this week, bouncing from the 50 day MVA (87.98) after some selling took the stock down from the November high at 93.98. ACS took out that level today on good volume (869,900; average 731,000), and we are looking at riding our positions toward the target in the 100-105 range. We are not looking at chasing it for new positions, as it has eclipsed its upper channel trendline at 94.
APPB (Applebee's--$33.03; +0.08; optionable): Leisure: Restaurants
http://biz.yahoo.com/p/a/appb.html
STATUS: Running into resistance. Tuesday APPB gave us a nice bounce up from the 10 day that continued into yesterday's close, but is now running into resistance at the recent pattern highs (33; the stock has been moving in a range since July from 26-33, and since early September it has formed a cup with handle). The stock tested down toward the 10 day MVA (32) before pulling up to close with a tight "hanging man" doji at that level today as volume dropped sharply to 423,800 (average 416,200). The candlestick pattern typically indicates that a run is coming to an end, at least for the moment. On a pullback, we will look for continued low volume and see if APPB can hold the 10 day, making a higher low in the handle and mustering strength for the next breakout attempt. Money flow, buying and relative strength are all strong. Target: 40
BUY POINT: After holding the 10 day on a pullback, the breakout move is 33.18 on minimum volume of is 620,000. Stop: 31.25 (18 day MVA is at 31.41).
POSITION: Stock and/or December $25 (AQB LE; 0 open interests) or February $25 calls to buy (AQB BE; low open interests thus far).
CBH (Commerce Bancorp--$74.51; -0.49; optionable): Banking
http://biz.yahoo.com/p/c/cbh.html
BACKGROUND: Last announced a 5:4 split on 6-29-98. The stock price was $54.63. The annual shareholder meeting was on 6-20-00 at which time no additional shares were authorized. The company has insufficient shares for a 2:1 split.
STATUS: The consolidation over support continues. CBH pulled back a bit more today, but still held over the 10 day MVA (74.54) as volume held steady at 78,300 (average 157,100). As we have discussed before, CBH has made four moves up the 18 day MVA (currently 73.81) since the markets re-opened , the most recent occurring last week, and is now approaching the left side high (77.90, from the v-shaped cup that dates back to early August). After four moves we often see a longer rest with a deeper pullback, so if it cannot hold here we will watch the 50 day (72.02). At any rate, we are looking for the formation of a solid handle for the breakout move. Target: 85.
BUY POINT: After a lower-volume consolidation over the 71.50 to 72.50 range, we will look for a breakout: 76.82 on volume of 240,000. Stop: 72.50.
POSITION: Stock and/or December $70 calls to buy (CBH LN).
FLIR (Flir Systems; $40.99; -4.01; optionable): Electronics - Scientific
http://biz.yahoo.com/p/f/flir.html
STATUS: Big drop today. FLIR had been moving along in the third week of a fairly stable, low volume consolidation over the short-term MVA's (10 day at 44.53), and we have been patiently waiting for it to break to the upside, although wary of a drop. FLIR sold back hard today on significantly increased volume of 501,500 (average 300,700), and tested down to the 50 day MVA (40.61) before catching itself and pulling up just a bit to close. As we have discussed before, strong stocks need to periodically test the 50 day, but this strong volume goes beyond what we like to see on such a move and indicates real weakness. Since we did not get the upside move we wanted, on this action we can change our focus to the downside, and on a breach of the 50 day on continued strong volume we will consider a put play. We may see a failed relief bounce from support first. The target is 35 (August high).
BUY POINT: From here or after a relief bounce fails, a move down through 40 on continued strong selling volume.
POSITION: January $50 puts to buy (FFQ XJ).
JEC (Jacobs Engineering--$74.04; -1.10; optionable): Construction. Did not get the announcement Thursday.
http://biz.yahoo.com/p/j/jec.html
BACKGROUND: Based upon our research it does not appear that JEC has ever split its stock. The annual shareholder meeting was on 2-13-01 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
STATUS: Looking like a pullback. Although we have seen a few sessions with slightly above average volume this month, JEC has been creeping up over the 10 day MVA (72.25) on generally below average volume - not the best action to set up a breakout, so we are not terribly surprised to see Tuesday's low volume attempt stall. JEC pulled back today on slightly lower volume of 148,800 (average 210,100), but still held well over the 10 day. We would like to see this pullback continue, and see JEC move into a more stable handle-type consolidation (gently drifting back rather than creeping up) to set up a breakout run. The high Wednesday was 75.70, with the left side high (from June) at 75.67. New target: 85
BUY POINT: After continuing to pull into a low-volume consolidation in the 71 range, 75.82 on volume of 320,000. Stop: 72.
POSITION: Stock or January $70 calls to buy (JEC AN).
PEP (Pepsico--$50.22; -0.06; optionable): Has not announced yet.
http://biz.yahoo.com/p/p/pep.html
BACKGROUND: Last announced a 2:1 split in April 1996 at a stock price of $60. The annual shareholder meeting was on 5-2-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Holding over 50. PEP tried to breakout Wednesday (of a ragged cup dating back to December), but the volume was lighter than we wanted to see, so we were watching to see if we got an announcement, or if we would get a quick pullback. PEP gapped down a bit to open and tested back toward the 10 day MVA (49.37), but then caught itself and pulled up to close over the former pattern highs as volume fell slightly to 4.60 million (average 5.38 million). Before Wednesday's attempt, the stock had been edging up the short-term MVA's on below average volume - not great action. So from here, we would like to see either a lot more volume (still looking for that announcement), or more of a pullback set up into a lateral or slightly descending consolidation over the 10 day MVA on continued low volume to set up a strong breakout move. Although we have not seen the announcement yet, PEP is still in the same range as Pepsi Bottling (PBG), which announced with a board meeting this month. Target: 60.
BUY POINT: After a low volume consolidation, the breakout: 50.58 on volume of 8.5 million. Stop: 47.50.
POSITION: Stock and/or January $45 calls to buy (PEP AI).
RMD (Resmed Inc.--$55.94; -0.71; optionable): Medical instruments.
http://biz.yahoo.com/p/r/rmd.html
BACKGROUND: Last announced a 2:1 split on 2-25-00 with a board meeting. The stock price was $68.
STATUS: RMD gave up support of the 18 day MVA (56.63) today, selling back toward the 50 day at (55) as volume fell slightly to 107,200 (average 249,000). With the low volume and close up over the intraday low (55.43), we are looking for RMD to test the 50 day and bounce. It has been solid as it trended up the right side of its cup (high on this move 59.90, high in left side 61.39), and this test back to the 50 day is not out of character and could produce another good move.
BUY POINT: After holding the 50 day, a move back over the 10 day MVA (currently 57) on above average volume. Stop: 54. Could take a couple of sessions to rest.
POSITION: Stock and/or January $55 calls to buy (RMD AK).
SLM (USA Education--$87.01; -0.15; optionable):
http://biz.yahoo.com/p/s/slm.html
BACKGROUND: Last announced a 7:2 split on 11-21-97 at a price of $132. The annual shareholder meeting 5-10-01 at which time additional shares were authorized.
STATUS: The breakout move has stalled. Not surprising given the low volume on the breakout attempt. SLM gapped up at the open today, but quickly reversed and fell back to close with a small loss on the day. Volume was higher on the move, but still below average at 525,800 (average 759,800). The gap up to a reversal typically indicates a pullback, so from here we will see if SLM can continue to hold the range of the pivot (86.83) and the left side highs (from the small cup dating back to the early October), or if it sinks back into a stable consolidation over the short-term MVA's (10 day at 85.64, 18 day at 84.85). Then we can look for a stronger breakout move. Target: 100.
BUY POINT: Aggressive: After pullback and holding over the 85 range, for a stronger move back up.
POSITION: Stock and/or January $85 calls to buy (SLM AQ).
End Part 3 of 4
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us stock market
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