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Begin part 3 of 3
Adds an additional play under Leaders
THE PLAYS:
Good movers: ADS; AKAM; ATVI; CTRP; CXW; JCP; LVS
New Plays:
New Post-Split Plays:
Play Date: 11/11/2006
VSEA (Varian Semiconductor--$38.77; +1.39; optionable): Chip equipment
http://biz.yahoo.com/p/v/vsea.html
STATUS: Reverse head and shoulders. VSEA broke out from a range double bottom with handle in September and rallied to mid-October, hitting 40 on that move. The past 5 weeks it has tested back, holding the 50 day EMA (36.72) for a week to end October, forming the head of the short pattern. Last week it showed better volume on the up sessions as it sets up to make the next break and run higher. Good little consolidation pattern to rest after the earlier breakout and set a further run. Vary interesting pattern.
Volume: 871.197K Avg Volume: 1.034M
BUY POINT: $39.11 Volume=1.2M Target=$44.98 Stop=$37.00
POSITION: UES BH - Feb. $40c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/vsea.html
Leader Plays:
Play Date: 11/11/2006
AKAM (Akamai Technologies--$50.07; +2.05; optionable): Internet content delivery and business processes
http://biz.yahoo.com/p/a/akam.html
STATUS: Double bottom w/handle. I am not sure what the heck Akamai means, but its ticker symbol in the market means leader. AKAM is setting up well for yet another run, forming a short but sweet 6 week base using the key support at the 50 day EMA (46.50) for the lows. Love to see a strong stock use the 50 day as support after a good run. Solid 3 to 1 accumulation in the pattern (3 up price weeks on rising volume to 1 down price weeks on rising volume) shows plenty of buying during the consolidation to once more break AKAM higher to a six year high. Suffered a distribution session Thursday after gapping higher and reversing. Nice recovery session Friday on above average volume complementing a strong Tuesday upside session.
Volume: 7.488M Avg Volume: 5.137M
BUY POINT: $50.75 Volume=7.5M Target=$60.95 Stop=$48.21
POSITION: UMU BJ - Feb. $50c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/akam.html
Play Date: 11/11/2006
CNH (CNH Global--$28.55; +0.35; optionable): Farm & construction machinery
http://biz.yahoo.com/p/c/cnh.html
STATUS: Test breakout. CNH broke higher from a cup with handle base a week back, rallying out of its 6 month cup with handle pattern on strong volume. Strong move Wednesday tried to extend the move, but Thursday it tested back. Holding above the 10 day EMA (27.77) on the test and looking to move in as volume and the stock price rally again. Strong money flow is leading higher. A company sporting some of the top earnings growth rates in the market along with the solid pattern.
Volume: 126.2K Avg Volume: 313.217K
BUY POINT: $28.92 Volume=470K Target=$34.75 Stop=$27.65
POSITION: CNH CE - Mar. $25c (78 delta, low OI) &/or Stock
http://www.investmenthouse.com/cs/cnh.html
Play Date: 11/11/2006
MA (MasterCard--$89.20; +1.00; optionable): Credit services, etc.
http://biz.yahoo.com/p/m/ma.html
STATUS: Test breakout. After that tremendous surge thus far this month MA is coming back to test on falling though still strong volume. It is holding well above the 10 day EMA (86.17) as it showed a doji on Friday, indicating the pullback is slowing and readying for the turn back up. We want to be ready to move back in and ride the next run when it starts the rebound this week. Can make masterful moves.
Volume: 2.854M Avg Volume: 2.298M
BUY POINT: $90.11 Volume=3M Target=$100.00 Stop=$87.55
POSITION: MA AR - Jan. $90c (57 delta)
http://www.investmenthouse.com/cs/ma.html
Play Date: 11/11/2006
NVEC (NVE Corp.--$41.33; +1.00; no options): Nanotechnology (spintronics)
http://biz.yahoo.com/p/n/nvec.html
STATUS: Breakout test. NVEC came to life in July after a one-year dormancy and we rode that to a nice gain. It formed a 5 week cup and broke higher again in mid-October and we are currently riding that move. Now it has worked laterally the past 4 weeks and the 18 day EMA (39.41) has risen to meet it. Low volume the past two weeks as the pattern tightens. Looking to move in on a strong bounce in volume accompanied by a price jump through the buy point.
Volume: 525.85K Avg Volume: 896.341K
BUY POINT: $41.89 Volume=1.1M Target=$50.45 Stop=$39.33
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/nvec.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.
AEOS: Forecast 11-14-06 before the open.
ANSS: Researching the date.
ATVI: Researching next day and moving well as we do so.
CMTL: Tentatively forecast 12-5-06
CTSH: Researching the next date.
GILD: Still hanging in there, holding the 18 day EMA on continued below average volume.
GYMB: Wildcard forecast 11-15-06 after the close
JCI: Researching date.
JCP: No split announced on 11-9-06, but super earnings are sending it higher again.
STT: Tentatively set for mid-December
TECH: Researching date. Announced earnings 10-25-06
UNP: Researching date. Announced earnings 10-19-06
NEW PRE-ANNOUNCEMENT PLAYS:
Play Date: 11/11/2006
AEOS (American Eagle Outfitters--$47.38; +1.78; optionable): Teen apparel stores. Forecast 11-14-06 before the open.
BACKGROUND: Last announced a 2:1 split on 2/4/05 at $53.90. Before that a 3:2 split 1-22-01 at $44. Before that it has 3 more splits.
http://biz.yahoo.com/p/a/aeos.html
EARNINGS: 11-14-06 before the open
STATUS: Flying plateau. We took AEOS off the report to let it set up better while we focused on some other plays, and now AEOS looks ready to move higher ahead of its earnings. Solid price move Friday had us looking hard at issuing an alert and entering, but trade was lackluster. Looking for some volume this week as AEOS clears its 7 week lateral move. Solid leader with all the credentials. It is an earnings play so there is associated risk if it misses. Like how it has consolidated ahead of the number, however, as opposed to running higher into it.
Volume: 2.073M Avg Volume: 3.032M
BUY POINT: $47.52 Volume=3.2M Target=$54.95 Stop=$44.95
POSITION: AQU BI - Feb. $45c (65 delta) &/or Stock
http://www.investmenthouse.com/cs/aeos.html
Play Date: 11/11/2006
GYMB (Gymboree--$46.97; +1.04; optionable): Kids apparel stores. Wildcard forecast 11-15-06 after the close.
http://biz.yahoo.com/p/g/gymb.html
EARNINGS: 11-15-06 after the close.
STATUS: Flying plateau. GYMB is another retailer that has enjoyed a good run, gapping higher in September out of a 13 week cup with handle base. It tested and bounced higher in mid-October and then fell into the current 5 week lateral move, holding the 18 day EMA (45.88) as support. Low volume last week as it worked quietly in its lateral range. Earnings are out on Wednesday, so it is a more aggressive play. Like the fact that it has worked laterally ahead of the results and has not built up a big move just ahead of earnings. Looking for some better volume as it makes its move.
Volume: 564.618K Avg Volume: 1.025M
BUY POINT: $47.69 Volume=1.5M Target=$56.95 Stop=$45.68
POSITION: GQU BI - Feb. $45c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/gymb.html
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 11/09/2006
ANSS (Ansys--$50.02; +0.68; optionable): Engineering simulation software
BACKGROUND: Last announced a 2:1 split on 8-5-04 at $45.70
http://biz.yahoo.com/p/a/anss.html
STATUS: Double bottom w/handle. Excellent handle is forming as ANSS slips back to test the 90 day SMA on lower and lower volume. It is set to make the breakout, getting a bit antsy over the 10 day. To recap: Coming back the past week on lower and lower volume, testing the 10 day EMA (48.22) after a big gap higher to start the month. This last move took it up to the early August high, the 'hump' in the middle of the 7 month base that is setting ANSS up for another new high. Money flow is screaming higher ahead of the price, and this little low volume pullback is setting the price up to scream as well.
Volume: 169.337K Avg Volume: 233.95K
BUY POINT: $50.45 Volume=355K Target=$58.45 Stop=$48.55
POSITION: QUS AJ - Jan. $50c (52 delta) &/or Stock
http://www.investmenthouse.com/cs/anss.html
CONTINUING PRE-SPLIT PLAYS:
Play Date: 10/31/2006
STLD (Steel Dynamics--$59.81; -0.90; 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. Worked laterally all week just on top of the 10 day EMA (59.12); it likes being on top. This is setting up a nice breakout. Just waiting for it to make a dynamic 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: 702.277K Avg Volume: 1.301M
BUY POINT: Aggressive: $61.31. 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: 11/09/2006
BHE (Benchmark Electronics--$26.68; -0.15; optionable): Printed circuit boards
http://biz.yahoo.com/p/b/bhe.html
STATUS: Test 50 day EMA. Still testing, holding the 50 day EMA (26.63) Friday on lower, average volume. Want to see a higher low here and volume as it jumps off the bench for a gain that is the benchmark for others in its sector. After a solid September to mid-October run BHE peaked and faded. It broke the 50 day EMA (26.63) to start the month, but held support at 26 and bounced. Gapped higher Thursday on the CSCO news but rolled over to close just over the 50 day. Looking for BHE to hold this level and start the run anew.
Volume: 639.2K Avg Volume: 579.441K
BUY POINT: $27.15 Volume=750K Target=$31.45 Stop=$26.38
POSITION: BHE DE - Apr. $25c (58 delta, low OI) or AYX AY - Jan. $26.62c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/bhe.html
Play Date: 11/09/2006
CMC (Commercial Metals--$26.99; -0.31; optionable): Steel and iron
http://biz.yahoo.com/p/c/cmc.html
STATUS: Double bottom w/handle. Still hugging the 10 day EMA as it completes the handle and sets up the breakout. Another steel stock that likes it on top. Thursday it jumped on strong, above average volume; looks ready, and just has to show us the move that sticks. To recap: Volume jumped above average Thursday as CMC tried the breakout move from its 6 month base and toward a new all-time high. It could not close the deal Thursday as it broke higher but closed off its high at 27.81. Looking for it to continue higher on strong trade.
Volume: 1.078M Avg Volume: 1.217M
BUY POINT: $27.52 Volume=1.8M Target=$32.95 Stop=$26.38
POSITION: CMC CE - Mar. $25c (63 delta) &/or Stock
http://www.investmenthouse.com/cs/cmc.html
Play Date: 11/04/2006
NBL (Noble Energy--$49.67; -0.15; optionable): Oil and gas
http://biz.yahoo.com/p/n/nbl.html
EARNINGS: Announced 11-1-06
STATUS: Cup w/handle. Could not extend Thursdays gap higher, easing back modesty on lower, below average trade. Still set to make the move from this most noble pattern. To recap: Continues working on the handle with some lower volume to start this week as it tests the 10 day EMA. Still in the handle, still ready to make the move, but yet to show it yet. Nice, but you know about those pretty pictures: that is all they are until they deliver.
Volume: 1.05M Avg Volume: 1.357M
BUY POINT: New: $50.08 (orig. $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: 11/08/2006
THQI (THQ, Inc.--$30.61; +0.64; optionable): Multimedia graphics software
http://biz.yahoo.com/p/t/thqi.html
STATUS: Test 50 day EMA. Still working laterally, setting up the next move though it got a bit rocky last week. It tanked to the 50 day EMA (28.94) but recovered nicely and on solid trade to boot. Good shakeout and now just waiting for the breakout on rising trade. To recap: Nice breakout in early September from a 5 month cup with handle base took THQI to 32 in mid-October. It came back to test, then sold a bit more to start November in that selling. That took it to the 50 day EMA early last week, but Wednesday it was full of fire as it rebounded to post a nice price gain on continued strong volume. Nice rebound off of key support, and looking to move in as it continues through the buy point.
Volume: 1.275M Avg Volume: 1.509M
BUY POINT: $31.38 Volume=2M Target=$37.72 Stop=$29.69
POSITION: QHI CF - Mar. $30c (60 delta) &/or Stock
http://www.investmenthouse.com/cs/thqi.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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