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us stock market, trade stock
Begin part 3 of 3
THE PLAYS:
Good movers: DRQ; WFR; EXPD; XPRSA
New Plays:
New Pre-Split Play:
Play Date: 08/26/2006
CXW (Corrections Corp of America--$62.98; -0.01; optionable): Private correctional facilities (private prisons). Splits 3:2 on 9-14-06
http://biz.yahoo.com/p/c/cxw.html
STATUS: Test 10 day EMA. CXW jumped up early last week but started to fade so we took some modest gain on the play, waiting to see if it came back to hold support so we could reload. Friday it broke below the 10 day EMA (62.70) intraday but then rebounded to close flat. That is what we wanted to see. Now we are looking to move back in with some options as CXW rebounds on some rising trade ahead of its split. A move to the target lands a 55+%ish gain.
Volume: 186.8K Avg Volume: 403.271K
BUY POINT: $63.22 Volume=405K Target=$68.75 Stop=$62.18
POSITION: CXW LM - Dec. $65c (43 delta)
http://www.investmenthouse.com/cs/cxw.html
New Post-Split Play:
Play Date: 08/26/2006
CTRP (Ctrip.com International--$50.52; -0.20; optionable): Chinese travel services
http://biz.yahoo.com/p/c/ctrp.html
STATUS: Okay then. Taking yet another look at CTRP as it sets up once again. We looked at it in late July but then if fell hard through the 50 day EMA (49.51) to start August just to rebound nicely the past two weeks on strong volume and now working laterally over the 50 day on lower trade. May come back to test toward 40.50 before it is ready to really move, but this one can take of like a shot at any point. Not a bad 6 week reverse head and shoulders forming with some solid money flow leading higher. Ready to move in as it continues higher if it can show us a bit more volume.
Volume: 220.473K Avg Volume: 400.585K
BUY POINT: $51.22 Volume=601K Target=$57.65 Stop=$49.39
POSITION: QCT LJ - Dec. $50c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/ctrp.html
Play Date: 08/26/2006
MTW (Manitowoc--$43.49; +0.92; optionable): Cranes and related products
http://biz.yahoo.com/p/m/mtw.html
STATUS: Double bottom w/handle. A lot of big machines have struggled, but MTW is setting up much better, using last week's general weakness in the large machines to form a low volume handle to its 15 week base. It used the 200 day SMA (37.92) on the low as support for the two legs, and this past week used the 50 day EMA (41.69) as support for the handle. Solid volume Friday in a low volume session as it jumped off the 50 day. Money flow is churning higher ahead of price, leading the way. Like how it has plenty of room to run upside without having to make a new high. It can also run fast, just what we need for this week. Really like the strong volume Friday as it tested and rebounded.
Volume: 935.9K Avg Volume: 1.184M
BUY POINT: $44.55 Volume=1.8M Target=$52.95 Stop=$42.22
POSITION: MTW LI - Dec. $45c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/mtw.html
New Leader Play:
Play Date: 08/26/2006
ASMI (ASM International--$17.13; -0.01; optionable): Chip equipment
http://biz.yahoo.com/p/a/asmi.html
STATUS: Double bottom w/handle. Excellent handle formed last week with a tight, low volume pullback to the 200 day SMA (17.06) after surging through that level two weeks back on strong volume. Nice handle to the 16 week base, holding the 200 day SMA and ready to follow the rising money flow higher. Plenty of room to run upside, and it can do it quickly as demonstrated on the last two legs higher; just what we want for this week.
Volume: 34.673K Avg Volume: 194.685K
BUY POINT: $17.55 Volume=285K Target=$20.97 Stop=$16.95
POSITION: IQB LW - Dec. $17.50c (52 delta) &/or Stock
http://www.investmenthouse.com/cs/asmi.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: Looking to third week of October for an announcement, and it will need to rally before then, but like the pattern a whole lot right here.
CBK: Did not perform well in last week's retail issues when home sales came in low. Dropping for now.
CMI: Nice test turned to a gap lower on volume. Not a good turn as it changed some character on us.
COG: Forecast late August. Still unable to pinpoint a date on this one, but this week could see the news.
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: Tentatively mid-October. Nice lateral move, refusing to give up its gains.
DHR: Some word on an announcement in the second week of September.
DVA: Mid-September
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.
GI: Wildcard. No splits in its history and keeping an ear out for a date given all of its cousins are announcing.
LUFK: Looking at early September.
SU: Late October
TRMB: Reported earnings 7-25-06. Has to set back up after that nasty tumble to the 50 day EMA last week.
NEW PRE-ANNOUNCEMENT PLAYS:
Play Date: 08/26/2006
CVD (Covance--$63.01; +0.01; optionable): Drug development services
BACKGROUND: No splits in CVD's history.
http://biz.yahoo.com/p/c/cvd.html
STATUS: Ascending base. A solid market leader, pinching off in its 18 week base, ready to breakout to a new all-time high. Excellent formation, making higher lows above the 50 day EMA (61.60) below some resistance at 63. Low volume during the last stage of this base; good, but now we want to see it jack up as it makes the break higher as that shows us the big boys accumulating it are joined by others wanting a piece of the action. That gives us the strong surge that can put money in our pocket quickly. Solid 5 to 3 accumulation in the pattern shows the buyers want it. Ready to follow the money flow higher.
Volume: 199.3K Avg Volume: 488.175K
BUY POINT: $63.89 Volume=732K Target=$71.88 Stop=$62.22
POSITION: CVD AM - Jan. $65c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/cvd.html
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 08/19/2006
CTSH (Cognizant Technology--$69.08; -0.62; 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: $68.92
STATUS: Ascending base. Nice, low volume lateral fade to the 10 day EMA (69.15) last week, testing the strong move higher two weeks back that took it to eh prior high near 71. Holding close to that level, and ready to use the 10 day EMA near support as the launch point for the next move to a new all-time high. Perennial market leader ready to lead on this next move higher. 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 (66.08), 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
Play Date: 08/05/2006
GI (Giant Industries--$71.79; +1.14; optionable): Oil and gas refining. No split with 8/8/06 earnings.
BACKGROUND: No splits in Giant's history, but it is at a point where some of its kin are announcing splits.
http://biz.yahoo.com/p/g/gi.html
STATUS: Cup w/handle. Gapped higher Friday and tapped at the breakout point as the energy sector started to show some life once more. Volume did not show anything, however, remaining well below average. Has gone dormant in its 18 week base, and the jump higher Friday put it on the radar. Need to see the volume come in as it makes the break higher.18 week base, and the jump higher Friday put it on the radar. Need to see the volume come in as it makes the break higher.
Volume: 165K Avg Volume: 306.14K
BUY POINT: $72.65 Volume=484K Target=$86.95 Stop=$68.77
POSITION: GI LN - Dec. $70c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/gi.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 08/21/2006
BRCM (Broadcom--$28.54; -0.40; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/b/brcm.html
After Hours: $28.58
STATUS: Test 50 day EMA. Locked and loaded, holding above the 50 day EMA (28.36) last week in a nice low volume test after blasting through that level two weeks back on strong volume. Broke its downtrend, broke the 50 day EMA, and now rested. Ready to move in as it rebounds. If the market moves well, we can even get aggressive and get in a bit lower in price than the original buy point. This may be a very good long term entry point for BRCM as well. We will just have to see how it plays out after the market makes this next run. 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: 9.157M Avg Volume: 17.123M
BUY POINT: Aggressive: $29.15 (orig. $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: 08/23/2006
CERN (Cerner--$44.92; +0.31; optionable): Healthcare information services
http://biz.yahoo.com/p/c/cern.html
STATUS: Double bottom w/handle. Still in the nice low volume test of the past week, easing back from the strong mid-July to mid-August run in its 5 month base. Solid market leader that has set up this base and is getting ready to move higher once more. To recap: Split to start the year, moved laterally through March, trying to set up a base, but failed, tumbling lower into May and July, where it made two legs to its 5 month base. Nice rally back in late July and early August, spending the last week pulling back to form the handle, tapping back at the 10 day EMA on very low, below average volume. Very nice fade to shake out the last sellers. Looking for volume to jump back in as CERN makes the breakout move.
Volume: 389.699K Avg Volume: 919.817K
BUY POINT: $46.58 Volume=1.4M Target=$53.55 Stop=$44.62
POSITION: CQN LI - Dec. $45c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/cern.html
Play Date: 08/21/2006
VIP (Vimple Communication--$50.25; -0.02; optionable): Russian wireless telecom
http://biz.yahoo.com/p/v/vip.html
STATUS: Cup w/handle. Gapped higher Tuesday on strong volume, but faded to give back most of the gain and then ended the week on lower trade with a modest lateral move above the 10 day EMA (49.43). Nice quiet end to the week and now set up to follow the money flow higher. To recap: Strong volume last Monday as VIP headed toward the breakout from its 14 week base that is setting up the move to a new all-time high. Positive 5 to 3 accumulation in the pattern (5 up price weeks on rising volume to 3 down price weeks on rising volume) shows plenty of buying, a good complement to the money flow that is running higher ahead of price. Ready to move in on continued solid volume as it moves through the buy point then again when it tests the breakout.
Volume: 810.8K Avg Volume: 1.037M
BUY POINT: $50.88 Volume=1.2M Target=$58.50 Stop=$48.75
POSITION: VIQ AJ - Jan. $50c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/vip.html
Play Date: 08/22/2006
VSEA (Varian Semiconductor--$34.20; -0.33; optionable): Chip equipment
http://biz.yahoo.com/p/v/vsea.html
After Hours: $34.24
STATUS: Double bottom w/handle. Just a pretty test of the 10 day EMA (34.14), holding that level last week on low volume, setting the handle for the next break higher. Set up just about as well as it can be and ready to step in this week. Moved the buy point a bit lower to account for this narrowing range on the test. 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: 438.756K Avg Volume: 887.455K
BUY POINT: Aggressive: $34.88 (orig. $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: 08/24/2006
DRIV (Digital River--$46.43; -0.57; optionable): e-commerce outsourcing solutions
http://biz.yahoo.com/p/d/driv.html
STATUS: Breakout test. Tried the move Friday, but no volume and it faded back, but still holding easily above the 18 day EMA (45.92). Nice breakout, nice test, just needs the market to come with it. To recap: DRIV made us some nice money on the last breakout 2 weeks back 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 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: 619.043K Avg Volume: 985.783K
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
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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