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us stock market, trade stock
Begin part 3 of 3
THE PLAYS:
Good movers: AGN; FTO; CAT; XPRSA
New Plays:
New Leader Play:
Play Date: 08/24/2006
DRIV (Digital River--$47.00; +0.22; optionable): e-commerce outsourcing solutions
http://biz.yahoo.com/p/d/driv.html
After Hours: $47.05
STATUS: Breakout test. DRIV made us some nice money on last week's breakout from its 14 week double bottom with handle base. Strong volume on that move and a low volume test this week, back to the 18 day EMA (45.86) Thursday, rebounding back up from that test lower on rising, average volume. Strong money flow remains. Like the strong rebound back up to the 10 day EMA after the test. The higher volume shows buyers coming back in. Looks ready to continue the breakout move.
Volume: 937.941K Avg Volume: 983.194K
BUY POINT: $47.55 Volume=1.2M Target=$54.75 Stop=$45.85
POSITION: DQI LI - Dec. $45c (63 delta) &/or Stock
http://www.investmenthouse.com/cs/driv.html
New Downside Plays: Yes we are expecting a rebound but these are ready to fall and we can take advantage of these downside leaders.
Play Date: 08/24/2006
CRI (Carter Holdings--$21.96; -0.63; optionable): Apparel
http://biz.yahoo.com/p/c/cri.html
STATUS: Put. Turning lower in a continuing downtrend that started in early May. Has been stumbling down the 18 and 50 day EMA, coming down off a test of the 50 day (24.36) in July. It rebounded to the 18 day EMA (22.73) the past week and is now turning down, showing much stronger volume as it did Thursday. Weak money flow and relative strength should be called relative weakness. Ready to move in on a further fall. A move to the target lands a 46%ish gain.
Volume: 713.3K Avg Volume: 854.574K
BUY POINT: $21.84 Volume=850K Target=$19.80 Stop=$22.55
POSITION: CRI XX - Dec. $22.50p (-51 delta)
http://www.investmenthouse.com/cs/cri.html
Play Date: 08/24/2006
EXPD (Expeditors Intl.--$39.59; -0.63; optionable): Air delivery & freight
http://biz.yahoo.com/p/e/expd.html
After Hours: $39.59
STATUS: Put. After a strong run in early 2006 EXPD tried another break higher in late June. It ran out of volume and failed, starting the current downtrend. It tumbled to the 200 day SMA (42.18), broke through and then came back to test that level a week back. Turned back down and creeping lower this week. Looking for a stronger drop from here as EXPD continues the downtrend. A move to the target lands a 42%ish gain.
Volume: 1.182M Avg Volume: 2.176M
BUY POINT: $39.38 Volume=2.2M Target=$37.10 Stop=$40.05
POSITION: URP VH - Oct. $40p (-49 delta)
http://www.investmenthouse.com/cs/expd.html
PRE-ANNOUNCEMENT PLAYS
We consider many stocks for pre-announcement plays every week. We get information regarding upcoming announcements and other data that leads us to conclude a split announcement is coming. Even then, however, we have to be discriminating, even more so in the current market. We have to see a strong technical pattern as well, and thus we reject many potential candidates based on a weak technical pattern. Many we considered have announced, but have not fared well given the market was top-heavy and ready to sell or their technical patterns were garbage.
The key today is to find stocks in strong patterns or that are ready to rebound off support. A split announcement will amplify the move higher in these cases as we enjoy moves from strong leaders in position to run higher. We won't chase a stock in a poor technical position even if we know it is going to split; it simply won't do us any good, i.e. it won't make us any money to the upside. We could list all stocks we think are going to split, but again, that won't make us any money unless we are in an office pool as to what stocks will or won't announce a stock split.
Current Pre-Announcement Plays:
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 and of course the strong earnings growth that put it in the pattern in the first place.
AAPL: Still ready to jump off of the 200 day SMA.
AGN: Researching next date as no split announced 8-2-06.
APH: Researching date. Starting the rebound off the test, moving on good volume.
CBK: Researching the next date as it moves laterally, trying to make a higher low.
CMI: Ear to the ground for another potential split date. Nice test underway.
COG: Forecast late August. Still unable to pinpoint a date on this one.
CPRT: Forecast late August. Making the nice test with a doji at the 18 day EMA Tuesday. Looks ready to rebound. Keep hearing talk of a split in late August or early September, but no definitive date.
CTSH: Nice lateral move, refusing to give up its gains.
DHR: Just coming off earnings but looking ready to move.
ESRX: Hearing talk of something in September, but no confirmation information yet.
FMX: Researching date. Announced earnings in late July.
FSH: Researching to pinpoint a date (reported earnings 7-26-06). Excellent test, easing back to the 10 day EMA.
HWAY: Reported earnings 7-26-06. Hanging on for what it can right now.
LUFK: Looking at early September.
SU: Researching the next date as no announcement with earnings.
TRMB: Reported earnings 7-25-06.
NEW PRE-ANNOUNCEMENT PLAYS:
Play Date: 08/24/2006
CPRT (Copart--$27.41; +0.11; optionable): Salvage vehicle sales via the internet. Forecast late August. Still nothing firm on this one.
BACKGROUND: Last announced a 3:2 split on 12-12-01 at $34.80. Was a frequent splitter at this level.
http://biz.yahoo.com/p/c/cprt.html
STATUS: Breakout test. CPRT made a low volume jump two weeks back, breaking higher out of its 5 month reverse head and shoulders base. It came back the past week, holding the 18 day EMA (27.25) on this test. Setting up for a new all-time high. After this test this time we want to see some volume.
Volume: 226.704K Avg Volume: 372.646K
BUY POINT: $27.72 Volume=550K Target=$32.95 Stop=$26.45
POSITION: KQJ AE - Jan. $25c (71 delta) &/or Stock
http://www.investmenthouse.com/cs/cprt.html
Play Date: 08/24/2006
DVA (Davita--$57.38; +0.59; optionable): Specialized health services
BACKGROUND: Announced its only 3:2 split on 5-17-04 at $46.20.
http://biz.yahoo.com/p/d/dva.html
STATUS: Cup w/handle. DVA is breaking higher from its 5 month base. Good price move Thursday, but no volume to accompany it yet. There is strong money flow leading higher and strong 6 to 3 accumulation (6 up price weeks on rising volume to 3 down price weeks on rising volume). Want to see some volume as it continues the break higher.
Volume: 371.1K Avg Volume: 742.382K
BUY POINT: $57.55 Volume=1.1M Target=$65.95 Stop=$55.95
POSITION: DVA AK - Jan. $55c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/dva.html
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 08/22/2006
DHR (Danaher--$65.53; -0.26; optionable): Industrial consumer products.
BACKGROUND: Last announced a 2:1 split on 4-22-04 at $93.60.
http://biz.yahoo.com/p/d/dhr.html
STATUS: Cup w/handle. Strong volume Wednesday as it ran in place, then tried the move Thursday on lower but still above average volume. It could not hold the move, but is still banging at the door. To recap: A bit early on DHR as well, but as with DKS, a nice pattern has formed and Tuesday it was showing strong volume as it bumped into the top of the handle to the 14 week base. Money flow is ratcheting higher ahead of price and DHR has shown some very good price/volume action the past week as it heads toward the breakout.
Volume: 1.767M Avg Volume: 1.514M
BUY POINT: $66.32 Volume=2M Target=$74.95 Stop=$64.55
POSITION: DHR LM - Dec. $65c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/dhr.html
Play Date: 08/19/2006
CTSH (Cognizant Technology--$69.70; +0.54; optionable): Custom IT software. No announcement w/early August earnings report. Researching next date.
BACKGROUND: Last announced a 2:1 split on 4-12-04 at $47.
http://biz.yahoo.com/p/c/ctsh.html
After Hours: $69.68
STATUS: Ascending base. Got a bit hairy Wednesday with a gap higher and drop, but tested the 18 day EMA (68.19) on the Thursday low and rebounded to hold nicely over the 10 day EMA. Lower volume, still working in a nice test of the breakout. Now we want to see that volume come back in. To recap: We are always cognizant of CTSH, looking for opportunity when it sets up. It has already made us some nice money and it is setting up to make us more, split or no split. CTSH broke higher form a 12 week base in early August, came back to test the move and the 50 day EMA (65.96), and then rebounded last week. It reached the early August high to end the week, and started to move laterally on lower volume. A top stock in terms of pattern and fundamentals strength.
Volume: 565.251K Avg Volume: 1.541M
BUY POINT: $71.11 Volume=1.8M Target=$79.00 Stop=$68.22
POSITION: UPU AN - Jan. $70c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/ctsh.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 08/21/2006
BRCM (Broadcom--$28.94; +0.09; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/b/brcm.html
After Hours: $28.90
STATUS: Test 50 day EMA. Another doji over the 50 day EMA (28.35), tapping the 50 day on the low and rebounding for a modest gain on low, continued below average volume. Still crouching for the next spring higher after the test of the breakout over the 50 day EMA. To recap: It has been a long time since January when we bought a bunch of BRCM and it bolted higher on strong volume. That was just about the apex of its run and shortly after it topped and rolled over. BRCM broke through its 4 month downtrend this month, moving laterally with SOX and then breaking sharply higher last Tuesday and Wednesday. Strong volume on the upside move shows the buyers (short coverers and long buyers) were moving in force. It then eased back to end the week and did more of the same Monday, fading toward the 50 day EMA on lower volume, below average. Has made the test of the 50 day EMA, and now looking for the bounce higher. This was a trend reversal move, and this is the first test of the stronger break higher. If it continues up from here on volume we know the buyers are back in.
Volume: 8.824M Avg Volume: 17.525M
BUY POINT: $29.75 Volume=20M Target=$36.00 Stop=$28.08
POSITION: RCQ AF - Jan. $30c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/brcm.html
Play Date: 08/22/2006
VSEA (Varian Semiconductor--$34.53; +0.25; optionable): Chip equipment
http://biz.yahoo.com/p/v/vsea.html
STATUS: Double bottom w/handle. Still testing back to the 10 day EMA (34.13) on low, below average volume, holding that near support and the May peak that marks the middle of the double bottom. Just about ready to make the move. To recap: Working on a handle to a ranging 7 month base. VSEA showed some good volume last week as it broke higher and cleared the hump in the middle of the pattern (34), moving to 36 on the high. It is now testing, coming back to hole the hump and the 10 day EMA that just happen to be coincident. Showed tow tight dojis at the 10 day EMA this week. May take a bit more time to finish forming up, but looking solid and a move could come at any time.
Volume: 554.762K Avg Volume: 908.754K
BUY POINT: $35.36 Volume=1.2M Target=$41.50 Stop=$33.74
POSITION: UES BG - Feb. $35c (52 delta) &/or Stock
http://www.investmenthouse.com/cs/vsea.html
CONTINUING LEADER PLAY:
Play Date: 08/19/2006
WFR (Memc Electronic--$35.65; +0.59; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/w/wfr.html
STATUS: Double bottom. Still working laterally on low, below average volume, forming the handle to the double bottom base. Very tight range, ready to break higher. To recap: WFR enjoyed the chip advance last week, breaking through the 50 day EMA on a strong shot of volume. It has been milling about the 200 day SMA (32.04), setting the bottom for the second leg of its 15 week. Nice surge on strong trade late last week, then falling back to start a test. It has held its ground above the 10 day EMA, and looking for a breakout.
Volume: 2.495M Avg Volume: 4.331M
BUY POINT: $36.04 Volume=5.5M Target=$43.00 Stop=$33.94
POSITION: WFR AG - Jan. $35c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/wfr.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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