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Begin part 3 of 3
THE PLAYS:
Good movers: GME; PCU; RDY
New Plays:
New Post-Split Play:
Play Date: 11/04/2006
NBL (Noble Energy--$49.11; +2.21; optionable): Oil and gas
http://biz.yahoo.com/p/n/nbl.html
EARNINGS: Announced 11-1-06
STATUS: Cup w/handle. Struggled a bit on earnings, but held the 3 month pattern by bouncing off the 50 day EMA (47.04 Thursday and jumping Friday on the strongest volume of the month. Very nice action as money flow leads higher. Energy is coming back after some big drops, and this is a great pattern.
Volume: 1.718M Avg Volume: 1.429M
BUY POINT: $49.45 Volume=1.7M Target=$56.95 Stop=$47.35
POSITION: NBL BJ - Feb. $50c (52 delta) &/or Stock
http://www.investmenthouse.com/cs/nbl.html
Play Date: 11/04/2006
SEIC (SEI Investments--$56.06; +0.49; optionable): Investment brokerage
http://biz.yahoo.com/p/s/seic.html
EARNINGS: Announced 10-18-06
STATUS: Test 50 day EMA. SEIC made us some nice money on its strong July to early October run, marching up the 18 day EMA (56.73). It peaked just over 60 mid-October and then started the current test. After a breakout and strong run up the short term moving averages a stock needs a deeper rest, and the 50 day EMA is typically the point it holds if the move is going to continue. After that test it rebounds and starts the run again. SEIC found the 50 day EMA (55.28) a week back and has moved laterally since then. Volume jumped Friday as it started to bounce. Looking to move in as it continues this rebound on solid volume off this support.
Volume: 787.777K Avg Volume: 611.408K
BUY POINT: $56.84 Volume=850K Target=$64.95 Stop=$55.32
POSITION: QEI CK - Mar. $55c (59 delta, 74 OI) &/or Stock
http://www.investmenthouse.com/cs/seic.html
New Leader Play:
Play Date: 11/04/2006
NTGR (Netgear--$26.11; -0.02; optionable): Telecom communications gear
http://biz.yahoo.com/p/n/ntgr.html
EARNINGS: Announced 10-27-06
STATUS: Test breakout. NTGR is another market leading stock in fundamentals growth, and it showed that again a week back when it announced earnings and gapped massively out of a 5 month cup with handle base. After such a move it was likely to test, and we were just watching it to see when it would start to hold. Wednesday it tested 26 and rebounded to cut its losses. Thursday and Friday it held 26 again. That point may prove to be the bottom of the pullback even though it is still well above the 10 day EMA (25.29) that is often used as support on breakouts. It can still test that level and if it does we will let it and then move in when it rebounds. If it continues higher from here as it looked like it wanted to do to end last week we will also be ready to move in with a buy.
Volume: 528.14K Avg Volume: 660.295K
BUY POINT: From the Friday close: $26.38. On a test of the 10 day EMA (25.29), 25.65 on the rebound. Volume=750K Target=$31.48 Stop=$24.98
POSITION: TUD CE - Mar. $25c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/ntgr.html
New buy point on current position:
Play Date: 11/04/2006
FFIV (F5 Networks--$64.17; +0.62; optionable): Internet traffic management software
http://biz.yahoo.com/p/f/ffiv.html
EARNINGS: Announced 10-25-06
STATUS: Test breakout. FFIV exploded out of a 7 month double bottom with handle base in late October on some solid earnings results. It showed a lot of strength, managing to hold its gains as the market weakened, though it started to give back some ground with the Wednesday selling. Not much, however. It held the line above the 10 day EMA (63.07) to end the week. The 10 day EMA is a good place for a strong stock to hold a breakout, and we are looking for FFIV to do just that and continue the breakout move with a bit more volume.
Volume: 809.39K Avg Volume: 976.405K
BUY POINT: $65.05 Volume=1.2M Target=$74.95 Stop=$62.95
POSITION: FLK DM - Apr. $65c (52 delta) &/or Stock
http://www.investmenthouse.com/cs/ffiv.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.
ANN: Forecast 11-17-06 before the open. Nasty gap lower Thursday. Will see if can set back up.
CMTL: Tentatively forecast 12-5-06
CTSH: Forecast 11-2-06. No announcement Thursday, but solid test of the 50 day EMA underway
JCP: Forecast 11-9-06
LVS: No announcement to start the month, but a good doji at the 50 day EMA Friday
PLMD: Forecast 11-7-06. Tanked to the 200 day to start the month. Not what you want to see ahead of a potential split announcement.
STT: Tentatively set for mid-December
TECH: Researching date. Announced earnings 10-25-06
UNP: Researching date. Announced earnings 10-19-06
WST: Forecast 11-2-06 before the open. Strong break higher though no split announcement.
NEW PRE-ANNOUNCEMENT PLAYS:
Play Date: 11/04/2006
ATVI (Activision--$15.85; +0.35; optionable): Multimedia and graphics software. Forecast 11-6-06
BACKGROUND: Frequent splitter. Announced its last split on 9-28-05 at $19.80 (4:3). Before that a 4:3 split on 2-23-05. Before that a 3:2 split on 2-12-04 at $20.10.
http://biz.yahoo.com/p/a/atvi.html
STATUS: Cup w/handle. Gapped higher Friday on rising, above average volume as many of the gaming related stocks had a good day. Almost to the breakout of its 12 month base, showing some very good volume the past two weeks. Strong money flow is leading higher, and looking to move in as ATVI continues higher and shows us the breakout. Games are looking to have a good holiday season.
Volume: 6.266M Avg Volume: 4.414M
BUY POINT: $16.14 Volume=5M Target=$19.38 Stop=$15.18
POSITION: AQV BC - Feb. $15c (64 delta) &/or Stock
http://www.investmenthouse.com/cs/atvi.html
Play Date: 11/04/2006
DECK (Deckers Outdoor--$51.29; -0.35; optionable): Footwear.
BACKGROUND: No splits in DECK's history.
http://biz.yahoo.com/p/d/deck.html
EARNINGS: Announced 10-26-06
STATUS: Test breakout. Nice breakout in September from a 5 month cup with handle base, running up the 18 day EMA (50.78). It gapped higher with earnings a week ago, and in the market weakness it has come back to fill that gap, holding Friday above the 18 day EMA on lower volume. Very good action on the breakout and test. Looking for it to continue the breakout move with some expanding volume. A strong pattern and another one of our stocks with fundamentals growth rates that are in the top 100 of the market.
Volume: 298.716K Avg Volume: 305.809K
BUY POINT: $52.38 Volume=4M Target=$62.95 Stop=$50.57
POSITION: QUK CJ - Mar. $50c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/deck.html
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 11/02/2006
CTSH (Cognizant Technology--$74.34; -0.66; 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. Traded lower intraday but then rebounded to close above the 50 day EMA (74.09), showing a big doji with tail. That looks to have shaken out the remaining sellers and expecting CTSH to rebound from here and continue the move. To recap: CTSH broke out from a 4 month ascending base in August and rallied up the 18 day EMA (76.21) through the end of October. It needed a deeper test after that run, and this pullback to the 50 day EMA 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: 3.068M Avg Volume: 1.323M
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--$59.37; +0.48; 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. Another nice doji on top of the 18 day EMA (58.44) as STLD continues the excellent handle formation above near support. All we have to do on this one is let it show us the breakout move. 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: 842.724K Avg Volume: 1.34M
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: 11/02/2006
CERN (Cerner--$49.09; +0.83; optionable): Healthcare information services
http://biz.yahoo.com/p/c/cern.html
EARNINGS: Announced 10-19-60
STATUS: Reverse head and shoulders. Started the breakout move Friday on some solid above average volume. It closed well off the high (49.81), however, and it may show a bit more testing to start the week. When it resumes higher, however, that is when we want to step in. To recap: 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 mid-week, but was looking solid Friday.
Volume: 1.067M Avg Volume: 564.441K
BUY POINT: New: 49.25 (orig. $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: 10/18/2006
CXW (Corrections Corp of America--$45.67; +0.55; optionable): Private prisons
http://biz.yahoo.com/p/c/cxw.html
STATUS: Breakout test. Still in the test of the early October gap higher, bouncing some Thursday and Friday. Still looking for a stronger move with strong volume to move in. To recap: Testing a bit deeper last week, but holding above the 50 day EMA (43.97) as it does. Just a further shakeout after the gap higher in early October on strong results; a modest correction.
Volume: 398.5K Avg Volume: 541.786K
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--$20.12; +0.09; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/q/qlgc.html
EARNINGS: Reported 10-24-06
STATUS: Breakout test. A pair of nice doji's on the 18 day EMA (19.99) to end last week on some very low, below average volume. Looks ready to resume the upside move having weathered the selling by making a nice, easy pullback. To recap: Coming back on lower volume as QLGC tests the late October 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 logically we like this rebound play.
Volume: 1.087M Avg Volume: 2.323M
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
Play Date: 10/31/2006
SPIL (Siliconware Precision--$6.40; +0.17; optionable): Semiconductor equipment
http://biz.yahoo.com/p/s/spil.html
STATUS: Cup w/handle. Still working on the handle to its 9 month base. Got a bit rocky last week with a test down to the 50 day EMA (6.12) on earnings, but a quick rebound and a solid upside move on above average volume Friday. It is near the breakout point and looking good with this smart recovery. Money flow is jumping higher ahead of price and looking for SPIL to spill out to a new high on this breakout move.
Volume: 2.778M Avg Volume: 1.776M
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
CONTINUING LEADER PLAYS:
Play Date: 11/01/2006
GLDN (Golden Telecom--$36.59; +0.33; optionable): Russian wireless telecom
http://biz.yahoo.com/p/g/gldn.html
EARNINGS: 11-8-06
STATUS: Breakout test. A nice doji with tale Friday at the 18 day EMA (36.19) as GLDN looks to have completed this pullback to test that nice breakout and run in October that took GLDN out of its reverse head and shoulders base. Solid action, and now just looking for a rebound on volume to move in. Looks golden.
Volume: 204.987K Avg Volume: 89.721K
BUY POINT: $37.22 Volume=245K Target=$44.45 Stop=$35.88
POSITION: QDV CG - Mar. $35c (58 delta, no OI) &/or Stock
http://www.investmenthouse.com/cs/gldn.html
Play Date: 10/31/2006
PMTI (Palomar Medical Tech--$46.57; +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. Another nice doji over the 10 day EMA (45.41) on low, below average volume as PMTI puts the finishing touches on its pullback to test the late October gap higher on earnings. As with GLDN, all we have to do here is wait for the break higher on rising volume. To recap: PMTI gapped higher to end October 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. 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: 253.903K Avg Volume: 387.809K
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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