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Begin part 3 of 3
THE PLAYS:
Good movers: COGO; ICE; LVS; NVDA
New Plays:
New Pre-Split Play:
Play Date: 10/31/2006
STLD (Steel Dynamics--$60.11; +0.06; optionable): Steel & iron. Splits 2:1 on or about 11-20-06
http://biz.yahoo.com/p/s/stld.html
STATUS: Double bottom w/handle. Testing back to the 10 day EMA (59.58) the past two sessions, holding that near support as it forms the handle to its 6 month base. Solid upside volume to finish the right side of the pattern and now a nice lower volume fade to form the handle. Did not get much mileage out of the split announcement, but the pattern is solid and STLD can rip off a lot of real estate in a hurry when it gets moving.
Volume: 1.522M Avg Volume: 1.368M
BUY POINT: $62.22 Volume=2.1M Target=$72.45 Stop=$59.95
POSITION: RQL BL - Feb. $60c (60 delta) &/or Stock
http://www.investmenthouse.com/cs/stld.html
New Post-Split Play:
Play Date: 10/31/2006
SPIL (Siliconware Precision--$6.44; +0.14; optionable): Semiconductor equipment
http://biz.yahoo.com/p/s/spil.html
EARNINGS: Reported 10-25-06
STATUS: Double bottom w/handle. Solid price/volume action the past week, i.e. strong volume on upside sessions and lower on the down sessions. Tuesday was in line with the strength as SPIL rallied on a strong shot of rising, above average volume. Looks ready to make the breakout from its 6 month base. Money flow is screaming higher ahead of price and we are looking for SPIL to follow it. Nicely set up as SPIL has a new high in its sights.
Volume: 2.568M Avg Volume: 1.728M
BUY POINT: $6.54 Volume=1.8M Target=$7.95 Stop=$6.09
POSITION: SRD AA - Jan. $5c (75 delta) &/or Stock
http://www.investmenthouse.com/cs/spil.html
New buy point on a current position:
Play Date: 10/31/2006
GRMN (Garmin Ltd.--$53.41; +0.85; optionable): GPS devices
http://biz.yahoo.com/p/g/grmn.html
EARNINGS: 11-1-06 before the open
STATUS: Breakout test. Earnings are out in the morning, and we are looking for those to help GRMN continue its breakout move. GRMN broke higher last week on strong, above average volume, clearing a 15 week double bottom with handle base. Nice breakout and a solid test, holding above the 10 day EMA (52.03) on this test. Looking to move in as GRMN continues higher to a new all-time high.
Volume: 3.478M Avg Volume: 3.271M
BUY POINT: $54.11 Volume=4M Target=$63.45 Stop=$51.88
POSITION: GQR DK - Apr. $55c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/grmn.html
New Leader Play:
Play Date: 10/31/2006
PMTI (Palomar Medical Tech--$47.09; -0.76; optionable): Light-based products for medical and cosmetic treatments
http://biz.yahoo.com/p/p/pmti.html
EARNINGS: Reported 10-24-06
STATUS: Test breakout. PMTI gapped higher last week on strong volume as it reported strong results and cleared a 6 month cup with handle base. It has immediately tested, coming back to the 10 day EMA (20.17) on Monday and rebounding modestly on Tuesday. It has not filled the gap, but we don't expect it to at this point; in other words we expect it to move higher near term before coming back to fill that gap. Money flow remains well out in front of the price, and we are looking for it to continue higher on rising trade to give us the entry to this market leading stock in pattern and fundamentals.
Volume: 535.684K Avg Volume: 392.63K
BUY POINT: $47.78 Volume=575K Target=$56.95 Stop=$45.95
POSITION: HKQ BJ - Feb. $45c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/pmti.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. We have to see a strong technical pattern as well, and thus we reject many potential candidates based on a weak technical position. Some we consider have announced, but have not fared well given their technical patterns were weak to begin with.
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.
AGN: Tentatively forecast 11-1-06.
ANN: Forecast 11-17-06 before the open
APH: No announcement this month but still working in the uptrend.
BDX: Forecast 11-2-06 before the open. Still testing the 50 day EMA
BIDU: No splits in its history. Forecast 11-1-06. Nice run ahead of the earnings and then hammered on the results.
CMTL: Tentatively forecast 12-5-06
CTSH: Forecast 11-2-06
DIOD: Could pop it off 11-1-06.
DVA: Forecast 10-30-06. Broke lower below key support at 56.
FMX: Forecast 11-2-06 after the close
GES: Forecast 11-1-06. Moved into some positions ahead of the close Tuesday.
JCP: Forecast 11-9-06
LH: No split announced 10-24-06, but good earnings and now a very nice test.
LVS: Forecast 11-1-06. Moved into positions ahead of the news.
PLMD: Forecast 11-7-06
RI: Researching date
STT: Tentatively set for mid-December
TECH: Researching date
UNP: Researching date
WST: Forecast 11-2-06 before the open
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 10/17/2006
CMTL (Comtech Telecom--$35.65; -0.12; optionable): Telecom equipment. Forecast 12-5-06
http://biz.yahoo.com/p/c/cmtl.html
STATUS: Cup w/handle. Forming a nice handle the past two weeks, holding the 18 day EMA (35.54) Monday and Tuesday. Good set up for a break higher in its 11 month base. Solid set up, now just has to show us the breakout action.
Volume: 151.001K Avg Volume: 262.337K
BUY POINT: $36.65 Volume=395K Target=$43.98 Stop=$34.98
POSITION: CQH DG - Apr. $35c (65 delta) &/or Stock
http://www.investmenthouse.com/cs/cmtl.html
Play Date: 10/23/2006
DIOD (Diodes--$44.04; +1.02; optionable): Semiconductor integrated circuits
BACKGROUND: Last announced a 3:2 split on 11-7-05 at $37.70. Before that a 3:2 split on 11-4-03 at $24.
http://biz.yahoo.com/p/d/diod.html
EARNINGS: 11-1-06
STATUS: Breakout test. Getting some momentum off the 50 day EMA test (41.82), breaking through its short term downtrend from the September high. Rising volume Tuesday looks to send it higher. Wednesday we will get a heads up on the stocks, and looking for a continued break higher to enter positions. If it gaps higher we will let it make the morning test and see if that holds, then move in with a partial position and then see if we can take some more as it makes its first test.
Volume: 477.373K Avg Volume: 475.352K
BUY POINT: $44.55 Volume=699K Target=$52.95 Stop=$42.38
POSITION: DUH CI - Mar. $45c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/diod.html
Play Date: 10/24/2006
TECH (Techne--$55.88; +0.07; optionable): Biotechnology. Forecast second week of November.
BACKGROUND: Last announced a 2:1 split on 11-9-00 at $105. Prior to that a 2:1 split on 10-23-97 at $40 (back when prices were not so inflated as in 2000).
http://biz.yahoo.com/p/t/tech.html
EARNINGS: Reported earnings 10-25-06
STATUS: Cup w/handle. Testing the low volume break higher last week, holding the 10 day EMA (55.31) on the lows and rebounding. Volume remains low as it tries to find its footing and continue higher in its 7 month base. Broke over the 200 day SMA (54.06) in early October, consolidated along that level, and then broke higher. Needs to show more volume as it continues higher, but a nicely set up base.
Volume: 93.3K Avg Volume: 194.678K
BUY POINT: $55.57 Volume=300K Target=$63.95 Stop=$53.95
POSITION: TGQ AK - Jan. $55c (56 delta, 41 OI) &/or Stock
http://www.investmenthouse.com/cs/tech.html
Play Date: 10/26/2006
STT (State Street--$64.23; +0.65; optionable): Regional bank. Announced earnings 10-17-06.
BACKGROUND: Last announced a 2:1 split on 12-21-00 at $119. Before that a 2:1 split on 2-20-97 at $80
http://biz.yahoo.com/p/s/stt.html
STATUS: Cup w/handle. Gapped higher Tuesday on a strong shot of rising, above average volume. Nice action that is pushing STT toward the breakout from its base. To recap: STT has held the 50 day EMA on this test, and we are looking for a rebound to move in. We are likely a bit early on any split announcement, but post-2000 splits are at lower prices and STT's sector tends to announce in this range. Regardless, it is a good test of the 50 day EMA, and volume shot higher Thursday as it came up and off that level. Looking for strong trade to continue as it moves higher through the buy point.
Volume: 1.954M Avg Volume: 1.299M
BUY POINT: $64.48 Volume=1.5M Target=$72.95 Stop=$62.48
POSITION: STT BM - Feb. $65c (49 delta) &/or Stock
http://www.investmenthouse.com/cs/stt.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 10/28/2006
CTRP (Ctrip.com International--$49.00; +0.10; optionable): Travel related services in China
http://biz.yahoo.com/p/c/ctrp.html
EARNINGS: 11-8-06
STATUS: Test 50 day MA. Nice pair of dojis as the 50 day SMA the past two sessions as CTRP moved on very low, below average volume. Still setting up nicely for the break higher. Just have to be patient and let it show the breakout move. To recap: CTRP is ready to make a trip of its own, working through a 16 week base and after a good surge to start last week is working on making a higher low at the 50 day SMA (48.37). That type of action often precedes a breakout move. Strong volume as CTRP moved up off the higher low made in early October, and we are ready to move in this week as CTRP rebounds off this test of key support (a level it broke through last week).
Volume: 192.358K Avg Volume: 382.926K
BUY POINT: $50.55 Volume=577K Target=$60.50 Stop=$48.21
POSITION: QCT CJ - Mar. $50c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/ctrp.html
Play Date: 10/30/2006
QLGC (Qlogic--$20.58; +0.20; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/q/qlgc.html
EARNINGS: Reported 10-24-06
STATUS: Breakout test. Gapped higher Tuesday on rising though still below average volume. Getting there; just want to see more upside on more volume to show us it is ready to move higher as it comes off the 10 day EMA test. To recap: Coming back on lower volume as QLGC tests last Wednesdays gap higher on strong earnings results. That move took it out of a 6 month cup with handle base and Monday it showed a hammer doji well above the 10 day EMA (20.08). May still come back to test this support, but want to be ready to move in as QLGC turns back up from the Monday close or the 10 day EMA. It shows it has the earnings and the accumulation behind it so we like this rebound play.
Volume: 2.249M Avg Volume: 2.312M
BUY POINT: $20.64 Volume=3M Target=$24.65 Stop=$19.88
POSITION: QLC DD - Apr. $20c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/qlgc.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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