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us stock market, stock split
Begin part 3 of 3
THE PLAYS:
Good movers: AEOS; DHR; DRQ; ECL; MOLX; NVDA; PLMD; QSII; VIP
New Plays:
New Pre-Split Play:
Play Date: 08/29/2006
CHAP (Chaparral Steel Company--$71.74; +2.43; optionable): Industrial metals & minerals. Splits 2:1 on 9-5-06
http://biz.yahoo.com/p/c/chap.html
STATUS: Ascending base. The split is the day after Labor Day and CHAP is starting the pre-split move, rallying Tuesday on a good shot of above average volume. Looking to jump in, ride it up as far as it will take us through Friday, take some of the gain off the table, and then keep some to ride through the split.
Volume: 538.9K Avg Volume: 500K
BUY POINT: $72.05 Volume=500K Target=$79.00 Stop=$69.92
POSITION: ZHQ AO - Jan $75c (52 delta)
http://www.investmenthouse.com/cs/chap.html
New Post-Split Play:
Play Date: 08/29/2006
VAR (Varian Medical Systems--$52.89; +0.23; optionable): Medical appliances and equipment
http://biz.yahoo.com/p/v/var.html
STATUS: Double bottom w/handle. VAR is quietly working on the handle to its 7 month base, working laterally the past two weeks above the 200 day SMA (51.53) on low, below average volume. This quiet work is setting up the break higher as money flow continues higher, and eventually that will break VAR out to follow it. This is one that is going to work for us even into September we believe, so we are going to be patient and when it shows us the move we will move in.
Volume: 640.2K Avg Volume: 984.285K
BUY POINT: $53.15 Volume=1.5M Target=$59.95 Stop=$51.95
POSITION: VAR AJ - Jan. $50c (68 delta) &/or Stock
http://www.investmenthouse.com/cs/var.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: Battery woes took it below the 200 day SMA this week but Tuesday it was on the rebound.
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.
CMI: Nice test turned to a gap lower on volume. Still in a foul position, sitting on the 200 day SMA the past three sessions.
COG: Forecast late August. Have been unable to pinpoint a date and it is running out of week.
CPRT: Forecast late August or early September. Keep hearing talk of a split in late August or early September, but no definitive date.
CTSH: Tentatively mid-October.
CVD: Wildcard as no splits in CVD's history.
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: With the merger with TMO the split may have to wait until they are merged.
GI: Wildcard. There won't be a split as it is being acquired by WNR
LUFK: Looking at early September.
SU: Late October
TRMB: Reported earnings 7-25-06. Bouncing off the 50 day EMA but not in great shape just yet.
NEW PRE-ANNOUNCEMENT PLAYS:
Play Date: 08/29/2006
WYNN (Wynn Resorts--$77.11; +1.50; optionable): Las Vegas resorts and casinos
http://biz.yahoo.com/p/w/wynn.html
After Hours: $77.11
STATUS: Double bottom w/handle. Nice lateral action the past two weeks as WYNN forms the handle over the 10 day EMA (75.18) to its 20 week base, looking for a new all-time high. Money flow is surging higher ahead of price and relative strength is close to the breakout as well. We are ready to move in on another good price day on a shot of volume as it showed Monday. This is a 'sin' stock, and thus it is likely to do well even if the market overall suffers some September dips.
Volume: 1.186M Avg Volume: 1.203M
BUY POINT: $77.65 Volume=1.2M Target=$88.00 Stop=$75.00
POSITION: UWY LO - Dec. $75c (59 delta)
http://www.investmenthouse.com/cs/wynn.html
Play Date: 08/29/2006
XTO (XTO Energy--$46.60; -0.51; optionable): Independent oil and gas
http://biz.yahoo.com/p/x/xto.html
After Hours: $46.60
STATUS: Reverse head and shoulders. Some energy stocks have used the weakness in the sector to simply set up better bases. XTO looks to be one as it works on its 7 month reverse head and shoulder base. Strong surge higher Friday on rising volume, then a test this week to fill that gap. Held support at 46, bouncing off that level smartly intraday. Looking for a volume break higher from here to give us the entry.
Volume: 2.558M Avg Volume: 3.634M
BUY POINT: $47.25 Volume=5.5M Target=$54.00 Stop=$45.95
POSITION: XTO AI - Jan. $45c (63 delta) &/or Stock
http://www.investmenthouse.com/cs/xto.html
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 08/19/2006
CTSH (Cognizant Technology--$70.55; 0.00; 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
STATUS: Ascending base. Perennial market leader ready to lead on this next move higher. Tried to make the move Monday but no volume. Got a bit wild Tuesday, coming back to the 18 day EMA (68.80) on the low and rebounding to close with a modest loss. Volume surged; looking for this to propel it to the next breakout. 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: 1.982M Avg Volume: 1.497M
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: 08/26/2006
CVD (Covance--$63.51; +0.46; optionable): Drug development services
BACKGROUND: No splits in CVD's history.
http://biz.yahoo.com/p/c/cvd.html
STATUS: Ascending base. Still bumping up at the breakout point, just waiting for the move from this solid pattern and this solid leaders. To recap: 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 (61.73) 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: 187.4K Avg Volume: 482.68K
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
Play Date: 08/09/2006
LUFK (Lufkin Industries--$64.97; +2.17; optionable): Oil and gas service company
BACKGROUND: Last reported a 2:1 split on 3-22-05 at $43.60.
http://biz.yahoo.com/p/l/lufk.html
Earnings: 7-19-06
STATUS: Reverse head and shoulders. Another one of the energy sector stocks that is setting up for a good move as the rest of the sector struggles. LUFK showed some rising though slightly below average volume Tuesday as it jumped up through resistance in its base. Need to see a bit more volume than that as it continues higher. To recap: Reported strong earnings and raised its guidance on 7-19-06, and then raised its dividend. Since then it has moved laterally, working on something of a handle to the base. Now in its fifteenth week, LUFK looks ready to make its move.
Volume: 129.711K Avg Volume: 173.517K
BUY POINT: New: $65.11 (orig. $63.95) Volume=225K Target=$76.00 Stop=$61.39
POSITION: UFR LM - Dec. $65c (47 delta) &/or Stock
http://www.investmenthouse.com/cs/lufk.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 08/21/2006
BRCM (Broadcom--$29.02; +0.32; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/b/brcm.html
After Hours: $29.09
STATUS: Test 50 day EMA. Volume edged higher and BRCM did the same as it tapped the 50 day EMA (28.40) once gain and rebounded. May finally be ready to make the next move higher after breaking its downtrend, clearing the 50 day EMA, and testing that level to regroup and set back up. 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: 10.503M Avg Volume: 17.005M
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: 08/26/2006
MTW (Manitowoc--$43.35; 0.00; optionable): Cranes and related products
http://biz.yahoo.com/p/m/mtw.html
STATUS: Double bottom w/handle. Nice test down to the 50 day EMA (41.82) on the Tuesday low and then rebounded to close near the 200 day SMA (38.12). Another nice shakeout and recovery that is setting up the move higher. Like how it has plenty of room to move. To recap: 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 on the low as support for the two legs, and this past week used the 50 day EMA 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. Again, 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: 625.2K Avg Volume: 1.183M
BUY POINT: New: $44.21 (orig. $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
CONTINUING LEADER PLAY:
Play Date: 08/26/2006
ASMI (ASM International--$17.38; +0.13; optionable): Chip equipment
http://biz.yahoo.com/p/a/asmi.html
STATUS: Double bottom w/handle. Looks about there, bouncing off the 200 day SMA (17.10) Tuesday on rising though still below average volume. Money flow continues higher ahead of the price and just looking for some more strength Wednesday to send it on its way back up. To recap: Excellent handle formed last week with a tight, low volume pullback to the 200 day SMA 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: 118.442K Avg Volume: 192.395K
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
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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us stock market
stock split
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