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PRE-SPLITS BEST PLAYS: Remember, we try to grab these as they break out of good patterns or as they start a run right before the split. Not looking for home runs, but looking for those $3 to $4 moves running into the split, watching for topping signs and potential resistance. Not huge money, but it can be very steady. We set our initial stops at the 7-8% range below the purchase price (or just below obvious support), and move them up on a move to preserve our profits.
1) HRH - We'll see if it can continue the move into the split
2) MOVI - Starting a move

HRH (Hilb Rogal & Hamilton; $56.40; 0.00; optionable): Insurance Brokers. Splits 2:1 effective 1-2-02.
http://biz.yahoo.com/p/h/hrh.html
STATUS: After a hard drop through the 50 day MVA (56.27) last week, HRH has made a run back up, taking out that level Thursday after a second consecutive move up. Friday it rested, holding the 50 day with a tight doji. One more session before the split, but after this rest it could give us another quick play. Watching some possible resistance in its November range of 58-60, with the high up at 62.75.
PLAY: 57, with stock.

MOVI (Movie Gallery--$24.41; +1.24; optionable): Splits 3:2 effective 1-4-02.
http://biz.yahoo.com/p/m/movi.html
STATUS: Starting a move back up in its range. MOVI jumped back over its 50 day and 18 day MVA's (23.85 and 24.18) Friday, having again used the 22.75 range for support. The moves up have encountered resistance at 26, although November and December moves have reached up to 28-30. Looking for continued momentum going toward next Friday's split.
PLAY: 24.70, with stock and/or January $22.50 calls to buy (QLV AX - low open interest; none for February options).

PAST SPLITS BEST PLAYS
1) FIC - Tried a breakout

FIC (Fair Isaac & Co--$65.00; +0.90; optionable): Business services.
http://biz.yahoo.com/p/f/fic.html
STATUS: FIC has moved into another handle (to a cup dating back to the July high of 69.90), and Friday it made a breakout move. However, after moving over the breakout buy point (65.12) and hitting up to 68.25, it pulled all the way back to close. Volume was huge at 703,700 (average 191,600), and although we could get a continued test back toward the 10 day MVA (63.41), this spike upward could indicate more upside action to come. Still targeting the all-time high at 69.90.
BUY POINT: After a bit of a test back toward the 10 day, a move back over 65.25 on continued strong volume. Stop: 60.68.
POSITION: Stock and/or April $60 calls to buy (FIC DL).

CONTINUING CANDIDATES BEST PLAYS:
1) AZO - Continuing the consolidation
2) ACS - Extended; be careful
3) FLIR - Could still give us a put
4) EASI - Looks poised to drop

AZO (Autozone--$72.89; -0.14; optionable): Auto Parts
http://biz.yahoo.com/p/a/azo.html
BACKGROUND: Last announced a 2:1 split in March of 1994 at a price of $58. The annual shareholder meeting was on 12-14-00 at which time no additional shares were authorized.
STATUS: Still waiting. AZO has formed a tight consolidation since its amazing breakout that hit 79.90 on huge volume when it announced its earnings. That was in early December, and since then it gradually pulled back to the support of its short-term MVA's (18 day at 72.58), moving laterally and showing tight dojis Thursday and Friday over the 18 day. Volume spiked way up Wednesday as the stock pulled back but held smartly at the 18 day, so we will see if strong volume vaults AZO back up for another solid play. Still looks nice. We are initially targeting the breakout high, and see how it handles that.
BUY POINT: Aggressive: A move over 75 on volume of 2 million (average 1.5 million; today 757,000). Stop: 70.22 (7%).
POSITION: Stock and/or March $70 calls to buy (AZO AN).

ACS (Affiliated Computer--$106.32; +1.87): Computer software.
http://biz.yahoo.com/p/a/acs.html
STATUS: We just continue to ride existing positions as ACS drifts upward, but we have been waiting for a drop back. It is getting quite extended over its upper channel trendline (which had been resistance in this uptrend since late 2000), currently at 100.20. Although volume was up on Friday's move (531,300; average 611,700), it has been quite low of late on this gradual ascent, and we continue to watch for a drop. On the drop, with existing positions we can look at selling some January $100 calls (selling for over $7 Friday), looking at the trendline as potential support (10 day at 102.82), but it could drop lower to the November high (97.45). When the stock finally does hold, that is the point at which the calls would be bought back at the lower price. In the alternative, we can look at a put play on a strong drop back, with the same targets for exiting the positions.
BUY POINT: Call sale: On a drop through 105 on increased volume. Puts: On the drop through 105 on volume in the 750,000 range.
POSITION: Call sale: January $100 calls to sell. (ACS AT). Puts: February $115 puts to buy (ACS NC).

FLIR (Flir Systems--$38.78; +1.78; optionable): Scientific & Technical instruments.
http://biz.yahoo.com/p/f/flir.html
STATUS: After tapping 35.61 at its low on a 'hammer' doji Thursday we were looking for a bounce, and FLIR made that move. We were watching the strength of the bounce to gauge our reaction with existing put positions, and the move was weak, coming on much lower volume of 274,800 (average 391,500). We continue to target 34 on the play, looking for a drop back down, and on that move we can look at new or additional positions as well.
BUY POINT: A drop through 38 on volume of 400,000 or better.
POSITION: February $45 puts to buy (FFQ NI).

EASI (Engineered Support--$34.82; +0.39; optionable): Aerospace/Defense.
http://biz.yahoo.com/p/e/easi.html
BACKGROUND: EASI last announced a 5:4 split on 2-1-2001 with a board meeting at a price of $28.50. Before that it announced on 6-12-98 at a price of $26.50. The company has sufficient shares for a 3:2 split.
STATUS: EASI has made a steady push back up from our put target of 30, but volume has been low and it could be setting up another play. It is encountering resistance at 35, showing a third consecutive doji at that level Friday (just over the 10 day, at 34.35). Volume has been very low on the ascent (up to 176,000 Friday; average 425,800), and from here, on a drop back through the lows from the last few sessions with solid volume, we can look at a put play back down to 30.
BUY POINT: On a move through 33.25 on average or better volume.
POSITION: February $40 puts to buy (UFE NH).

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REMAINING PLAYS:
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PRE-ANNOUNCEMENTS REMAINING PLAYS:

Watchlist:

DHR ($60.15; -0.54): Forecast to announce a split in late January in conjunction with earnings. At this time, the company cannot confirm a date for earnings release; however, it has declared a quarterly dividend which could make a split announcement less likely. DHR is trying to scratch back up after taking a fall on a downgrade. It is again battling a long-term down trendline at 61.50, dropping back from that level again to close, and it appears to be forming the right shoulder to a head and shoulders pattern. We will see if it can hold on and form up better.

SRCL ($60.42; -1.08): Forecast to announce a split on 2-19-02 after the market closes in conjunction with earnings. Dipped back Friday on stronger volume (330,400; average 275,400), holding its 18 day MVA (60.17) to close. It has been riding up that support since visiting the 50 day in mid-November, and it could still make another move from here, but it has bounced three times off of the 18 day MVA after the breakout, and we are reluctant to chase it here until it corrects back further. Watch existing positions for a break below the 18 day; we are also looking at selling some January or February $60 calls on that move.

EDS ($69.00; -0.60): We are researching a date. Has made recent double tops and fallen back, holding the 50 day MVA (67.27) but not making an impressive move. We got huge volume after a gap down and bounce last week, but for positions we would need to see a move over the high of 72.45 with volume in the 4 million range (average 3.38 million), with stock and/or March $70 calls to buy (EDS CN).

BMS ($49.48; +0.26): We are researching a date in January. After the weak breakout early this month, BMS has dipped back, holding its 50 day (48.25) but not able to move back up over the short-term MVA's (18 day at 49.57). It could be in for another visit to the 50 day, and if it can bounce over the current resistance with a strong move we can look at positions. It will need to set up a bit more.

BRL ($80.60; +0.39): Researching a split date. Was in a nice lateral pattern, but has drifted up along its 10 day MVA (78.82) on light volume. The aggressive can make a play from here, but we need to see volume; also, we will remember that breakouts from this type of upwardly-moving pattern can be prone to quick failure. 82 on volume of 1.1 million or better (500,000 Friday), with stock and/or February $75 calls to buy (BRL BO).

FDC ($78.90; -0.40): Working on a forecast date. Made a breakout but on low holiday volume, although Friday saw the stock gap back for a loose doji as volume increased to 1.72 million (average 1.94 million). It could be headed back for a test of the 18 day MVA (76.77), and having made two tests of the 18 day since its breakout, we could see a couple of more bounces on this move to ride with longer term positions. From here we would need to see a move to 80.32 on above average volume, with stock and/or February $75 calls to buy (FDC BO).

NDN ($38.55; -0.63): Researching a date. Pulling back again after an attempt to break from its handle failed on weak volume. We will see if it can hold the 18 day (38.24) on the retreat, still looking for the breakout move of 40.22 on volume of 600,000, with stock and/or March $35 calls to buy (NDN CG).

THQI ($49.89; -1.31): We are working on a date. A failed breakout turned into a failed test of the 50 day (53.45), and THQI has again dropped back from that level. Has some further support there from October consolidation lows at 50 and the 200 day at 48.60, so we will see if it can hold.

TRDO ($26.80; -0.24): Working on a date. Rolling up and down in the range of 26-31, but TRDO has been stymied with loose dojis under the 50 day (27.52, with its short-term MVA's) for the last four sessions. Be patient; it did this in late November as well. Still looking for a move back over 28 on above average volume (314,500; today down to 189,500), with stock and/or February $25 calls to buy (UNC BE).

XL ($90.30; +0.30): Researching a date. Continues to move in a tight range, holding about its 50 day MVA (90.21) but constrained by the short-term (18 day at 91.05). Volume moved up Friday to 1.2 million (average 1.4 million), and we are watching for a possible jump out of its slumber. The break to a new high is a move over 96.50 on volume of 2.7 million, and the aggressive play is on a move over 93 on above average volume, both with stock and/or April $90 calls to buy (XL DR).

SONC ($36.38; -0.65): We are working on a date. SONC made a steady move up on very low volume the past couple of weeks, including a couple of stronger moves recently (including Wednesday). It has pulled back the last couple of sessions, but is holding its prior highs and 10 day MVA (35.88) with the light volume dip. Protecting existing positions, but if it can hold the 36 range on a low-volume pullback it can set up again.

WLP ($116.74; +0.34): Working on a date. In a large cup dating back to late December 2000 (left side high: 120), but it has fallen out of its handle consolidation, catching its 50 day MVA (114.22). It has tried a move this week, but it was weak and showed a 'tombstone' doji Friday. We will see if it can develop.

Plays:

DIAN (Dianon Systems--$62.00; +1.65; optionable): Forecast to announce a split in 1-17-02 with earnings. At this time the company cannot confirm this date.
http://biz.yahoo.com/p/d/dian.html
BACKGROUND: Based upon our research it does not appear that DIAN has ever split its stock. The annual shareholder meeting was on 10-25-00 at which no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: The upward momentum resumed Friday, but the volume continued to fall (down to 146,100, average 203,400) and the stock could not clear the recent breakout high of 62.25. Still targeting 65, but with the falling volume we may see it consolidate a little more. On a pullback we are looking for 60 to hold once again, and for above average volume to support another push. Excellent money low and buying. Target: 65.
BUY POINT: After holding 60, a move back over 62 on above average volume. Stop: 57.66.
POSITION: Stock and/or February $60 calls to buy (UID BL - low open interest).

JCI (Johnson Controls--$81.13; -0.09; optionable): Auto parts. Forecast to announce a split on 1-18-02 in conjunction with earnings. At this time, the company cannot confirm this date.
http://biz.yahoo.com/p/j/jci.html
BACKGROUND: Based upon our research it does not appear that JCI has ever split its stock. The annual shareholder meeting was 0n 1-24-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Little change Friday. JCI is now back in the range of its pre-September 11 range. It recently started a strong move up from the mid-December lows at 77.50, but the move has stalled and it is now holding a tight consolidation over its short-term MVA's (10 day at 80.53). Volume was rising as JCI closed with three consecutive doji's over that support - Friday showed us the fourth doji in the series but this time volume to fell to 288,800 (average 406,000). We want to see support continue to hold, watching for a strong market to spur a move over the recent high (82.70). Target: 90.
BUY POINT: 82.82 on volume of 700,000. Stop: 77.25.
POSITION: Stock and/or January $75 calls to buy (JCI AO - low open interest).

MI (Marshall & Ilsley--$63.81; +0.71; optionable): Banking: Regional. We are researching a forecast date.
http://biz.yahoo.com/p/m/mi.html
BACKGROUND: Based upon our research it does not appear that MI has ever split its stock. The annual shareholder meeting was on 4-24-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: MI has made four runs from the 18 day MVA (currently 62.92) since recovering from the attacks, and may be setting up for a fifth run as it showed signs of pushing out of the current gently downward sloping consolidation Friday. The stock moved up from that level and briefly tapped through our aggressive buy point (if the volume had been there) before pulling back to close. Volume increased considerably but remained below average at 217,900 (average 248,900). We are quite cautious of 5th runs; we often do not see them, and if we do they can fail quickly. However, MI has proved steady and resilient, so if we see increased strength on a move over the recent high (64.24) we will consider it. We will also exercise caution with stops. The 50 day is back at 61.13.
BUY POINT: The aggressive can pay a move over 64.24 on volume of 300,000 or better. Stop: 62.
POSITION: Stock and/or March $60 calls to buy (MI CL).

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