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stock watch, stock split
Begin Part 3 of 4
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) CHBS - Tried to break out and still could in the wedge
2) LYTS - Pulling back into a nice handle after the big move
CHBS (Christopher & Banks--$38.14; -0.86; optionable): Retail apparel. Splits 3:2 effective 12-13-01.
http://biz.yahoo.com/p/c/chbs.html
STATUS: Tried to breakout Friday, but in a common pattern for the session, the stock pulled back off of its high of 40. CHBS is in an ascending wedge handle, formed after it recently broke from its previous ranging handle to a cup (dating back to May, high of 47.50). Before Friday the stock has hit resistance twice at 39.40, holding support on the pullbacks at the 18 day MVA (currently 36.99), making higher lows. The attempt Friday to breakout did not have the volume we were looking for (in at 372,700; average 404,000), and without the power it could not hold on. However, we will see if it can hold on to the 10 day (37.80) or the 18 day, and make another attempt as it draws toward the split. The target on a move over the high is 46, but with all pre-splits we stand ready to take profits as stocks can be volatile at this time.
PLAY: Aggressive: After holding the 18 day, a move over 39.40 on above average volume, with stock and/or January $35 calls to buy (URH AG). Stop: 37. Breakout: 40.12 on volume of 540,000, with stock and/or January $35 calls to buy (URH AG). Stop: 37.50.
LYTS (Lsi Industries--$25.25; -0.13; no options): Splits 3:2 effective 12-7-01.
http://biz.yahoo.com/p/l/lyts.html
STATUS: Holding up well after an outstanding pre-split move. LYTS made it back over its 50 day MVA (23.60) and made a big move up last Friday, and continued up this week before dipping the last three sessions. This is a healthy pullback, with LYTS showing loose dojis on decreasing volume (11,500 Friday; average 25,200), Friday dipping down to 24.91 but managing to recover to close. This has been quite a move from the recent lows at 22, and the stock is now lurking just below resistance from its October high at 25.95. After this bit of rest, we will look for LYTS to make another move up and over resistance. If it can, we will carefully watch resistance from the all-time high of 27.65, which was our initial target on this move; if it can clear that, we are looking at 30, but will heed topping signs as we go. After the recent move it could still drop off, so we are protecting existing profits, but it is looking pretty strong at the moment. Excellent money flow and buying.
PLAY: From here: 26.07 on volume of 37,000. Stop: 24.50. Stock only.
POST-SPLITS BEST PLAYS:
1) WFMI - Pulling laterally toward support after the big move
WFMI (Whole Foods--$42.91; -0.09): Grocery stores. Split 2:1 on June 5.
http://biz.yahoo.com/p/w/wfmi.html
STATUS: WFMI has made a couple of very strong moves this month, breaking to a new high. It has now pulled laterally for the past seven sessions and is getting snug with its 10 day MVA (41.86). It moved up from that level Wednesday, but as it has approached the recent high (43.61) volume has decreased, Friday dipping back to 569,200 (average 732,000) as WFMI showed a doji. We will see if it dips back again to test the 10 day, and if it does we will look for a strong move to a new high. It has held up well on this move, but we will continue to carefully protect profits. Good money flow. Target: 48.
PLAY: 43.73 on volume of 800,000, with stock and/or January $40 calls to buy (FMQ BH). Stop: 40.67 (7%).
MARKET FAVORITES BEST PLAYS:
1) IBM - Nice pattern from an important stock
2) CSCO - Another important stock moving up in the handle
IBM (IBM--$115.59; +1.16; optionable): Computer Hardware.
http://biz.yahoo.com/p/i/ibm.html
STATUS: IBM is in a cup with handle, moving back up this week after a dip through recent support of the 18 day MVA (113.53). The cup dates back to May (left-side high 119.74), and the handle looks solid after a failed attempt to move 2-3 weeks ago. The move back up over the last two sessions has been on continued light volume (down to 5.59 million Friday; average 8.65 million), so we will look for strength to kick in with a rally to push the breakout. Target: 130.
BUY POINT: 117.12 on volume of 13 million. Stop: 112 (just below the 18 day).
POSITION: Stock and/or January $110 calls to buy (IBM AB).
CSCO (Cisco--$20.44; +0.55; optionable): Computer Hardware.
http://biz.yahoo.com/p/c/csco.html
STATUS: In a cup that is deep in its base. CSCO has moved back up from 11 since early October, hitting 20.77 before pulling back last week but holding its 18 day MVA (19.31). Volume was not that severe on the drop into the handle, but neither has it been strong on the move back up in the pattern the last two sessions. Friday CSCO moved closer to the handle high, running on slightly higher volume of 74.6 million (average 77.4 million). In a rally we are looking for a breakout, with a target of 25. Good relative strength and money flow.
BUY POINT: Breakout: 20.89 on volume of 115 million. Stop: 19.43 (7%).
POSITION: Stock and/or January $17.50 calls to buy (CWQ AW).
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REMAINING PLAYS:
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PRE-ANNOUNCEMENTS REMAINING PLAYS:
Watchlist:
EASI ($42.45; +1.57): Forecast to announce a split on 12-10-01 in conjunction with earnings. At this time, the company cannot confirm this date. Has crept up on low volume, but faces resistance at the 50 day MVA (44.31). The 10 day (42.08) has been recent resistance, but it cleared it today on low volume. Still a put on a drop back through 40 on above average (450,000; Friday up to 263,400) volume, with January $50 puts to buy (UFE MI - very low open interest).
GTK ($44.89; -0.01): Forecast to announce a split on 12-13-01 in conjunction with earnings. At this time the company has not confirmed a time for the release. Bounced up from the 18 day MVA (43.58) Thursday, but volume was weak and it could only manage a doji Friday on continued low volume (189,900; average 329,800). Not a promising move so far, but we will keep our eyes on a possible break to a new high over 45.62 on above average volume, with March $40 calls to buy (GTK CH -low open interest).
DHR ($58.65; -1.55): Forecast to announce a split in late January in conjunction with earnings. At this time, the company cannot confirm a date for earnings release. Fell back through the neckline of its reverse head and shoulders pattern, taking out its 10 day MVA (59.69) and down trendline as well. Volume was strong on the selling (1.59 million; average 1.28 million). Did not get the breakout, and now we will have to wait to see if it can catch support and set up another move (200 day at 57.59, 50 day at 56.95).
XL ($92.98; -0.91): Researching a date. Trying to tighten into a pennant pattern. XL pulled back Friday to close over the short-term MVA's (18 day at 92.47) after its low-volume move over that level Thursday. The break to a new high is a move over 96.50 on above average volume, and the aggressive play is on a move over 95 on above average volume (2 million; today 836,600), both with stock and/or January $90 calls to buy (XL AR).
EDS ($69.22; +0.71): We are researching a date. We were leery of the move up Tuesday (after its rather weak move up along the 10 day), and EDS turned back hard. It stopped the drop, at least for the moment, at the 18 day MVA (68.29), moving back up Friday. We will see if it can hold or if it needs to retest the left-side cup highs near 66 (50 day at 65.02).
FDC ($73.24; +0.25): Working on a forecast date. Still holding on in a somewhat lateral consolidation after having broken over the left side of its cup (72), holding the short-term MVA's (10 day at 72.50, 18 day at 71.81). Today it hit 74.16 but pulled back for a loose doji. Breakout is 74.23 on volume of 3 million, with stock and/or February $70 calls to buy (FDC BN). On current positions we will look at selling some December $70 calls if it falls below the 18 day MVA, buying them back at support at the 50 day MVA (69).
MI ($61.43; -0.82): We are researching a forecast date. MI is gradually making its way up along the short-term MVA's (10 & 18 day at 61.47 and 60.90) since the breakout. It pulled back Friday on higher volume to test its 10 day and recent highs. We will see if it can hold the 18 day (a breach signals an exit), and generate another bounce. On the bounce, the aggressive can look at stock and/or January $55 calls to buy (MI AK). Recent high is 62.90.
SONC ($32.72; +0.42): We are working on a date. After the weak move up we were looking for a drop, and SONC has done that, but is holding the 50 day MVA (32), bouncing a bit on low volume Friday. Not the strong bounce that we were looking for. We will see if it can hold on and set up.
Plays:
TRDO ($27.35; +1.45): 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: Tried to move back over the 50 day (27.03; 18 day at 27.31), but the rebound was on weak volume (202,000; average 323,500). It might take a while to make a move back over resistance and form a cup (recent high from October at 33.79), but with an announcement we could get a quick run, watching the recent high as the target.
STATUS: With an announcement we will look at a move over 28.50. Stop: 26.50 (7%).
BUY POINT: Stock and/or February $25 calls to buy (UNC BE).
SRCL (Stericycle--$55.38; -0.81; optionable): Waste management. Forecast to announce a split on 2-19-02 after the market closes in conjunction with earnings.
http://biz.yahoo.com/p/s/srcl.html
BACKGROUND: Based upon our research it does not appear that SRCL has ever split its stock. The annual shareholder meeting was on 5-15-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Still holding support. SRCL has made a solid move since the attacks, and made a solid bounce earlier this month from the 50 day MVA (then 47.50; now 50.40). It used the 10 day MVA (55.37) for a nice bounce earlier this week, hitting a new high at 58.50 before retreating with the market Wednesday. We were looking for a bounce off of Thursday's doji, but volume was not there and the stock dipped back Friday after reaching up to 57.25 intraday. The selling was not severe as volume dropped back to 211,500 (average 266,500), so we will continue to watch for it to hold and see if it can muster a move. Still targeting 65.
BUY POINT: New high: 58.62 on above average volume. Stop: 55.
POSITION: Stock and/or February $55 calls to buy (URL BK).
THQI (THQ Inc.--$57.29; +1.29; 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: Started strong but pulled back. THQI made a solid move up from the 50 day MVA (52.16) on Thursday and started with another strong move Friday. However, after hitting 59.46 at its high the stock pulled way back to close (just below the most recent breakout high, at 59.79). Volume was down but still strong at 1.74 million (average 1.29 million), so we could see THQI continue the downward momentum at least for a bit Monday, but we will see if it can hold the recent highs at 56. If it cannot, we will take profits on any remaining positions. Beyond the recent high is the all-time intraday spike at 62.
BUY POINT: After holding 56 on a continued dip, a move back over 57.30 in a strong market. Stop: 53.75 (18 day MVA at 53.89).
POSITION: Stock and/or January or March $50 calls to buy (QHI AJ or QHI CJ).
BBY (Best Buy--$71.39; +1.14; optionable): Forecast to announce a split on 12-18-01 in conjunction with earnings. The company has not confirmed a time for the release.
http://biz.yahoo.com/p/b/bby.html
BACKGROUND: Last announced a 2:1 split on 2-22-99 with a board meeting. The stock price was $95. Prior to that announced a 2:1 split on 4-24-98 with a board meeting. The stock price was $71. The annual shareholder meeting was 6-26-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Moved back up, but it was weak. After its strong move Monday, BBY gently dipped back to test the highs in the left side of its cup (69.90), looking rather promising with the low volume series of dojis. It would have been fine to continue sliding back toward its 10 day MVA (68.74), but Friday it popped back up, moving over the buy point but on low volume (2.7 million; average 3.6 million). This move does not inspire confidence, but we will see if it pulls back a bit again and forms a better, longer handle that will test the 10 day (18 day is at 66.18). We are targeting 80 on a solid move.
BUY POINT: After pulling back in the handle and testing the 10 day, a buy point of 72.12 on volume of 5.4 million. Stop: 67.25.
POSITION: Stock and/or January $70 calls to buy (BBY AM).
End Part 3 of 4
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stock watch
stock split
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