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Begin part 3 of 3
THE PLAYS:
Good movers: BRCM; DRIV; GES; JCP; LTD; PLCE
New Plays:
New Post-Split Play:
Play Date: 11/02/2006
CERN (Cerner--$48.26; +0.26; optionable): Healthcare information services
http://biz.yahoo.com/p/c/cern.html
EARNINGS: Announced 10-19-60
STATUS: Reverse head and shoulders. CERN is bumping up against the breakout to its 10 month base. Nicely formed up, and it ran higher in mid-October on the earnings report. Stalled out some the past three sessions and we are looking for this action to lead into the buy point for us.
Volume: 533.006K Avg Volume: 564.647K
BUY POINT: $48.78 Volume=600K Target=$56.48 Stop=$46.95
POSITION: CQN CW - Mar. $47.50c (60 delta) &/or Stock
http://www.investmenthouse.com/cs/cern.html
Play Date: 11/02/2006
MTW (Manitowoc--$52.75; -0.20; optionable): Farm and construction machinery
http://biz.yahoo.com/p/m/mtw.html
EARNINGS: announced 10-24-06
STATUS: Test breakout. Nice gap higher last week on earnings that took MTW out of its 6 month cup with handle base. It tapped the May high in the base on the moved and faded back to test this week, holding the 10 day EMA (52.54) Thursday, showing a doji on low, below average volume. Solid money flow continues higher, and we are looking for MTW to follow it back up after this breakout. Solid stock with some of the best earnings growth rates in the market.
Volume: 543.2K Avg Volume: 833.697K
BUY POINT: $55.44 Volume=1.3M Target=$66.48 Stop=$52.44
POSITION: MTW CK - Mar. $55c (48 delta, 61 OI) &/or Stock
http://www.investmenthouse.com/cs/mtw.html
New Leader Play:
Play Date: 11/02/2006
AMT (American Tower--$37.05; +1.05; optionable): Telecom towers
http://biz.yahoo.com/p/a/amt.html
EARNINGS: 11-6-06 (not confirmed)
STATUS: Test 50 day EMA. Broke out from a 3.5 month cup with handle base in August and rallied up the 18 day EMA (36.63). It peaked at 38 mid-October and then tested, coming back to the 50 day EMA (36.10) the past two weeks. Showing some very strong volume on the upside sessions, Thursday being one. Like that strong upside buying and ready to move in even ahead of earnings if it can show us the move.
Volume: 3.069M Avg Volume: 2.235M
BUY POINT: $37.75 Volume=3M Target=$43.95 Stop=$35.88
POSITION: AMT DU - Apr. $37.50c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/amt.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. No announcement with the Wednesday earnings.
ANN: Forecast 11-17-06 before the open
BDX: Forecast 11-2-06 before the open. No announcement on Wednesday bit recovered to hold the 50 day EMA Thursday.
CMTL: Tentatively forecast 12-5-06
CTSH: Forecast 11-2-06
DIOD: Could pop it off 11-1-06. Folded the tent.
FMX: Forecast 11-2-06 after the close. Not seeing anything yet.
GES: Forecast 11-1-06. No announcement but outstanding earnings
JCP: Forecast 11-9-06
LVS: Forecast 11-1-06. So much for that play; LVS dumped lower.
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. Strong break higher.
NEW PRE-ANNOUNCEMENT PLAYS:
New buy point on current play:
Play Date: 11/02/2006
CTSH (Cognizant Technology--$75.00; +0.49; optionable): Business software
BACKGROUND: Last announced a 2:1 split on 4-12-04 at $47.
http://biz.yahoo.com/p/c/ctsh.html
EARNINGS: Reported 11-2-06 after the close
STATUS: Test 50 day EMA. CTSH broke out from a 4 month ascending base in August and rallied up the 18 day EMA (76.43) through the end of October. It needed a deeper test after that run, and this pullback to the 50 day EMA (74.08) is quite typical. Volume was high Wednesday as it undercut the 50 day but rebounded to close above that level. Thursday it gapped lower but then rallied back to hold that level again. Reported earnings after hours and was trading basically flat. Looking to see if they can push CTSH through the buy point on Friday.
Volume: 3.145M Avg Volume: 1.324M
BUY POINT: $76.55 Volume=2M Target=$87.95 Stop=$73.11
POSITION: UPU DO - Apr. $75c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/ctsh.html
CONTINUING PRE-SPLIT PLAYS:
Play Date: 10/31/2006
STLD (Steel Dynamics--$58.89; -0.60; 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 a bit further, falling to tap the 18 day EMA (58.33) on the low and bounced to recoup some losses. Still in a nice test and just being patient to let it show us the bounce back up. To recap: Testing to form the handle the past week, holding 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: 803.192K Avg Volume: 1.364M
BUY POINT: 60.05; Breakout: $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
CONTINUING POST-SPLIT PLAYS:
Play Date: 10/28/2006
CTRP (Ctrip.com International--$47.85; +0.46; optionable): Travel related services in China
http://biz.yahoo.com/p/c/ctrp.html
EARNINGS: 11-8-06
STATUS: Test 50 day MA. Still a nice test as CTRP tries to make a higher low here at the 50 day EMA (47.83). Holding up well with a low volume price decline as the market sells. 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. 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: 330.487K Avg Volume: 381.815K
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: 10/18/2006
CXW (Corrections Corp of America--$45.12; +0.11; optionable): Private prisons
http://biz.yahoo.com/p/c/cxw.html
STATUS: Breakout test. Testing a bit deeper the past two sessions, but holding above the 50 day EMA (43.90) as it does. Just a further shakeout after the gap higher in early October on strong results. Volume was up Thursday but still below average as CXW started to make the jump.
Volume: 420K Avg Volume: 549.708K
BUY POINT: $46.48 Volume=600K Target=$54.85 Stop=$44.78
POSITION: CGY CX - Mar. $43.375c (67 delta) &/or Stock
http://www.investmenthouse.com/cs/cxw.html
Play Date: 10/30/2006
QLGC (Qlogic--$20.03; -0.13; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/q/qlgc.html
EARNINGS: Reported 10-24-06
STATUS: Breakout test. Still testing, showing a nice doji Thursday at the 18 day EMA (19.97) on low, below average volume. Nice fill of the gap and set up to make the rebound. 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 it has spent the past week coming back to test. It shows it has the earnings and the accumulation behind it so we like this rebound play.
Volume: 1.47M Avg Volume: 2.321M
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
CONTINUING LEADER PLAYS:
Play Date: 10/31/2006
PMTI (Palomar Medical Tech--$46.34; +0.23; 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. Continuing the test Thursday, showing a modest gain with a doji on low, below average volume. Excellent breakout and nice, orderly test. Nice test and ready for the next move higher. To recap: 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 on Monday and continuing the action Tuesday and Wednesday. 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: 255.727K Avg Volume: 392.818K
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
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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