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Begin part 3 of 3
THE PLAYS:
Good movers: BRO; CELG; CRDN; GG; GS
New Post-Split Play:
Play Date: 03/04/2006
CWTR (Coldwater Creek--$22.07; -0.27; optionable): Retail clothing stores, etc.
http://biz.yahoo.com/p/c/cwtr.html
After Hours: $21.80
STATUS: Cup w/handle. Volume has moved back above average the past two weeks as CWTR completed the right side of its 14 week base. It has eased back to end last week, coming to test the 10 day EMA (21.82) and form the handle, the final shakeout of the last sellers to put demand ahead of supply. Then the stock is cleared to make the breakout. Solid 4 to 2 accumulation in the base (4 up price weeks on rising volume to 2 down price weeks on rising volume) shows strong buying, setting the foundation for the breakout. CWTR needed this consolidation after a good run to end the year, letting it set up for the next breakout to a new all-time high. Top fundamentals to match.
Volume: 1.571M Avg Volume: 1.263M
BUY POINT: $22.81 Volume=1.9M Target=$27.45 Stop=$21.39
POSITION: UCJ GX - July $22.50c (52 delta) &/or Stock
http://www.investmenthouse.com/cs/cwtr.html
Play Date: 03/04/2006
QCOM (Qualcom--$47.63; -0.20; optionable): Telecom equipment and licensing
http://biz.yahoo.com/p/q/qcom.html
After Hours: $47.82
STATUS: Reverse head and shoulders. A nice little 8 week accumulation base has formed, using the 50 day EMA (46.78) as support for the 'head.' This base consolidates the January breakout and rally from QCOM's larger base, one that started in December 2004. Positive 3 to 1 accumulation in the current base shows plenty of buying above the 50 day EMA, a key support level. Strong money flow. A current leader in this market, showing strong fundamentals to go with its pattern that is ready to break to a 5 year high.
Volume: 11.38M Avg Volume: 12.96M
BUY POINT: $48.88 Volume=19M Target=$57.95 Stop=$46.55
POSITION: AAO GW - July $47.50c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/qcom.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.
ANN: Forecast 3-10-06
BLUD: Researching date.
CEPH: Just announced earnings in February, but liked the pattern and now the run higher.
CLZR: Researching date.
CNQ: Forecast 3-16-06
CRDN: New information: Forecast to announce a split 3-9-06.
CTSH: New information: Forecast 3-8-06.
DBRN: No 3-1-06. Will see how it fares on a bounce off the 50 day EMA.
DRI: Forecast 3-20-06
FRK: Forecast 4-25-06 after the close or 5-3-06
GG: Forecast 3-10-06. Nice break higher last week.
GS: Forecast 3-16-06 before the open.
IEX: Tentatively forecast for third week of April.
ITG: Forecast first week of March. No announcement but broke higher on some solid volume.
JEC: Forecast 4-25-06
LM: Researching to pinpoint a date. Right now it looks like late April.
MATR: Researching to pinpoint the exact date.
ODP: No split announcement in late January. ODP continues to move higher above the 10 day EMA on stronger volume.
PNRA: Forecast 4-12-06
POOL: Researching next date
VMC: Tentatively set for late April
New Pre-Announcement Plays:
Play Date: 03/04/2006
ANSS (Ansys--$47.7; -0.27; optionable): Engineering simulation software for aerospace, auto, electronics, biomedical industries. Researching to pinpoint a date, but wanted to get it on with this breakout test.
BACKGROUND: Last announced a 2:1 split on 8-5-04 at $45.70.
http://biz.yahoo.com/p/a/anss.html
STATUS: Breakout test. ANSS surged higher in mid-February on strong earnings and an acquisition. That broke it out from a 13 week reverse head and shoulders base, sending ANSS to a new all-time high. It eased back to end January and start February, falling on low volume to test and hold the 10 day EMA (47.59). Volume jumped Thursday as ANSS tried the break higher, but it faded. Friday it showed a tight doji at the 10 day EMA. Solid breakout and test, and strong fundamentals to boot. Looking for volume as it jumps back up and through the buy point.
Volume: 88.078K Avg Volume: 323.913K
BUY POINT: $48.89 Volume=475K Target=$56.95 Stop=$47.31
POSITION: QUS GJ - July $50c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/anss.html
Play Date: 03/04/2006
BR (Burlington Resources--$91.21; -0.11; optionable): Independent oil and gas. Forecast 4-27-06.
BACKGROUND: Last announced a 2:1 split on 1-21-04 at $59.10.
http://biz.yahoo.com/p/b/br.html
STATUS: Cup w/handle. A short and shallow pattern has formed above the 50 day EMA (87.60), consolidating the December breakout from a 10 week double bottom with handle pattern. Excellent 4 to 0 accumulation (4 up price weeks on rising volume to 0 down price weeks on rising volume) in the pattern shows all buying as BR moves above this key support. Strong money flow. Not only oil and gas but railroads as well, a double punch in this economy. Just going to let it show us the breakout move and then we step in.
Volume: 2.777M Avg Volume: 5.644M
BUY POINT: $91.88 Volume=7M Target=$104.95 Stop=$90.05
POSITION: BR HR - Aug. $90c (65 delta) &/or Stock
http://www.investmenthouse.com/cs/br.html
Play Date: 03/04/2006
CTSH (Cognizant Technology--$58.73; +0.47; optionable): e-business solutions and application management. Forecast to announce a split 3-8-06.
BACKGROUND: Last announced a 2:1 split on 4-12-04 at $47. Prior to that a 3:1 split on 3-5-2003 at 69.80.
http://biz.yahoo.com/p/c/ctsh.html
After Hours: $58.80
STATUS: CTSH has not faded, just stepping laterally the past week as the 10 day EMA (57.32) rose up to meet it. It is still moving higher up the 10 day EMA after the early February gap higher took it out of an 11 week flat base. We were looking for another test to move into the stock, but this lateral move while it holds its gains is a sign of strength, and if we see another strong upside move from CTSH get underway we will go ahead and take some positions ahead of the potential split announcement on Wednesday. Strong market leader with excellent credentials.
Volume: 935.2K Avg Volume: 1.421M
BUY POINT: $59.15 Volume=2M Target=$68 Stop=$57.12
POSITION: UPU GL - July $60c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/ctsh.html
Play Date: 03/04/2006
DAKT (Daktronics--$35; -0.71; optionable): Scientific and technical instruments. Just announced earnings on 2-15-06. Researching to pinpoint the date, but really like this low volume test so did not want to wait.
BACKGROUND: Last announced a 2:1 split on 5-24-01 at $29.20. Before that a 2:1 split on 12-7-99 at $24.
http://biz.yahoo.com/p/d/dakt.html
STATUS: Breakout test. DAKT got a case of the dips in mid-February, crashing through the 50 day EMA (31.64) when it reported earnings. It was a one-day affair, however, as earnings were solid and DAKT shot right back up, breaking out anew from a 6 week lateral base. It spent the past two weeks easing back on low volume to the 10 day EMA (34.88), holding that level Wednesday through Friday. Strong money flow is leading higher even as DAKT makes the test. Very strong market leader with excellent fundamentals to set the stage for the next move to a new all-time high.
Volume: 73.824K Avg Volume: 111.91K
BUY POINT: $35.81 Volume=168K Target=$41.95 Stop=$34.64
POSITION: QKC GG - July $35c (60 delta) &/or Stock
http://www.investmenthouse.com/cs/dakt.html
Play Date: 03/04/2006
LEH (Lehman Brothers--$147.71; +1.90; optionable): Investment brokerage. Forecast to announce a split 3-15-06 before the open.
BACKGROUND: Last announced a 2:1 split on 9-20-00 at $144.
http://biz.yahoo.com/p/l/leh.html
After Hours: $147.51
STATUS: Flying plateau. LEH is making the second test of the 18 day EMA (144.55) after the early January breakout from a 6 week flat base. LEH has been on a tear since May 2005, but it continues to show strength. It should make a few more such runs off the 18 day EMA during this cycle, and Friday LEH was up on rising volume, ready to make the next break higher from this 2 week lateral move. Strong money flow is leading the way and relative strength is ready to breakout. Looking to move in as LEH makes the next move. Given the price we are using options to leverage our way into the play.
Volume: 2.075M Avg Volume: 2.018M
BUY POINT: $148.95 Volume=3M Target=$167.55 Stop=$144.45
POSITION: LES GJ - July 150c (54 delta)
http://www.investmenthouse.com/cs/leh.html
Play Date: 03/04/2006
MSCC (Microsemi--$31.36; +0.09; optionable): Semiconductor integrated circuits. Forecast to a split 4-27-06.
BACKGROUND: Last announced a 2:1 split on 1-26-04 at $32.40. Before that a 2:1 split on 5-11-01 at $44.60.
http://biz.yahoo.com/p/m/mscc.html
STATUS: Ascending base. MSCC has made higher lows along the 50 day EMA (29.72) since breaking higher in late November. Starting January it has continued up the 50 day EMA, but finding resistance at 31.80ish. It is building pressure for the next break higher as the higher and higher lows push up against that constant resistance. That can lead to strong breakouts. Excellent 5 to 0 accumulation in the base shows a lot of buying as MSCC sets up for the breakout move. Excellent pattern and excellent fundamentals are setting the stage for the breakout move.
Volume: 596.716K Avg Volume: 794.938K
BUY POINT: $31.88 Volume=1.3M Target=$38 Stop=$30.58
POSITION: QMS FF - June $30c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/mscc.html
Continuing Pre-Announcement Plays:
Play Date: 02/23/2006
FRK (Florida Rock--$58.44; -0.17; optionable): Cement. Still researching an exact date.
BACKGROUND: Frequent splits. Last announced a 3:2 split on 5-4-05 at $59.50.
http://biz.yahoo.com/p/f/frk.html
STATUS: Cup w/handle. Excellent low volume handle continues forming over the 10 day EMA (58.03) showing a tight doji Friday at that level. Strong money flow continues to shoot higher as FRK fades in the handle; a nice positive. To recap: Now working on the handle to its 19 week base, starting the move in late January on strong trade. Big upside volume sessions have punctuated upside surges on this run. Forming the handle and our buy is when it clears that consolidation. Excellent 9 to 3 accumulation in the base shows a lot of buying, complementing the surging money flow.
Volume: 293K Avg Volume: 599.049K
BUY POINT: $59.75 Volume=850K Target=$71.75 Stop=$57.05
POSITION: FRK IL - Sept. $60c (52 delta) &.or Stock
http://www.investmenthouse.com/cs/frk.html
Play Date: 03/01/2006
SLAB (Silicon Labs--$49.96; +0.06; optionable): Semiconductors. Researching to pinpoint the date.
BACKGROUND: A new issue in 2000, SLAB has yet to split its stock.
http://biz.yahoo.com/p/s/slab.html
After Hours: $49.88
STATUS: Test 50 day EMA. Some good upside volume sessions last Wednesday and Friday as SLAB sets up the handle to its short 6 week base that has formed over the 50 day EMA (44.80). May take another day or two to finish the pattern, but looking very good here. To recap: SLAB gapped higher in late January on a strong earnings prognosis. It rallied to 52.50 and then faded back the past 5 weeks to test the move and fill most of the gap. It held mostly near the 18 day EMA (47.83), testing toward the 50 day EMA on an intraday basis and then rebounding. Strong money flow continues to lead higher. Accumulation is positive. Looking to move in on a continued move higher on solid volume.
Volume: 1.192M Avg Volume: 1.207M
BUY POINT: $50.76 Volume=1.8M Target=$60.95 Stop=$47.68
POSITION: QFJ GJ - July $50c (60 delta) &/or Stock
http://www.investmenthouse.com/cs/slab.html
CONTINUING PRE-SPLIT PLAYS:
Play Date: 03/02/2006
APC (Anadarko Petroleum--$102.07; +0.34; optionable): Independent oil and gas. Splits 2:1 on 5-30-06
http://biz.yahoo.com/p/a/apc.html
After Hours: $101.45
STATUS: Test 50 day EMA. Modest gain Friday on much lower, below average volume. APC basically took the ay off, but it held the 10 day EMA (100.80) on the low, still ready to continue the move higher into its split. Just want to see volume jump back up as APC continues higher. To recap: As with many energy stocks, APC has formed a short double bottom pattern around the 50 day EMA (110.17), rallying Thursday on a strong shot of volume. Double bottoms are known for their up and down action, and this is no exception. Nice low volume fade the past two weeks has set up the move. Want to see continued strong trade as APC continues the move. Funny thing; APC does have oil production, but it is known as a natural gas company and natural gas is not heading higher right now.
Volume: 1.611M Avg Volume: 2.559M
BUY POINT: $102.89 Volume=3M Target=$118 Stop=$99.72
POSITION: APC EA - May $105c (49 delta)
http://www.investmenthouse.com/cs/apc.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 03/02/2006
WFT (Weatherford International--$44.48; -0.16; optionable): Oil and gas service company
http://biz.yahoo.com/p/w/wft.html
STATUS: Reverse head and shoulders. Took the day off as well Friday, holding basically steady on lower, below average volume after the solid volume move higher Thursday. While many energy stocks sold hard of late, WFT held tough, and it is ready to make the move. To recap: Volume punched up to just above average last Tuesday and Thursday as WFT reached lower and recovered and then started the break higher. Strong money flow is leading the way higher as WFT moves for a new all-time high. WFT rallied nicely from its breakout in December and needed a breather. The current 7 week base that formed using the 50 day EMA (41.23) at the 'head', a good place for WFT to find support. Looks ready to make the all-time high.
Volume: 1.895M Avg Volume: 3.518M
BUY POINT: $44.89 Volume=5M Target=$51.95 Stop=$42.64
POSITION: WFT HI - Aug. $45c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/wft.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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