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Begin part 3 of 3
THE PLAYS:
New Plays:
New Post-Split Plays:
Play Date: 12/21/2006
FRX (Forest Labs--$50.75; -0.21; optionable): Drugs
http://biz.yahoo.com/p/f/frx.html
STATUS: Cup w/handle. Working on a very nice, orderly two week handle to its 10 week base that has formed over the 50 day EMA (49.81). This is part of a much larger 3 year base, and it looks as if it is the tail end of the base. A breakout would definitely help prove that. Very nicely formed base with positive accumulation setting the stage for a breakout. Just have to be patient and let it show us that move.
Volume: 1.495M Avg Volume: 2.4M
BUY POINT: $52.24 Volume=3.5M Target=$59.95 Stop=$50.55
POSITION: FHA EJ - May $50c (64 delta) &/or Stock
http://www.investmenthouse.com/cs/frx.html
New buy points on current positions:
Play Date: 12/21/2006
CTRP (Ctrip.com International--$62.43; -1.02; optionable): Chinese travel site
http://biz.yahoo.com/p/c/ctrp.html
STATUS: Breakout test. Nice surge for us already on this breakout run, and after a 10 point rise off the 10 day EMA (61.45) already this month it is testing the 10 day EMA again, coming back to tap it Thursday on low volume. It rebounded to cut some losses, setting up for the next move. It may need to snug up against the 10 day a bit more before it is ready to move higher. We want to be ready when it turns back up as it can run like a deer when it gets going. Looking for CTRP to pay for my next trip to the islands.
Volume: 364.001K Avg Volume: 409.458K
BUY POINT: $63.88 Volume=475K Target=$73.48 Stop=$61.22
POSITION: QCT CL - Mar. $60c (65 delta) &/or Stock
http://www.investmenthouse.com/cs/ctrp.html
Play Date: 12/21/2006
SVVS (Savvis Communications--$36.30; +0.53; no options): Info tech services (IP VPN, hosting, digital content, network services, etc.)
http://biz.yahoo.com/p/s/svvs.html
STATUS: Breakout test. SVVS has already started a good move, breaking out form a 6 month ascending base to start December and rallying to 38. It has spent the past week coming back on very low volume, testing the 10 day EMA (35.25) on the lows the past two sessions and then starting back up Thursday. Volume did not start up with it, but it sure is set up to continue the breakout.
Volume: 143.579K Avg Volume: 387.78K
BUY POINT: $36.65 Volume=400K Target=$43.98 Stop=$34.95
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/svvs.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.
ATVI: Tentatively set 2-5-07. Trying to hold after breaking below the 18 day EMA, but needs to set up a bit more.
BCR: Forecast mid-January
BDX: Forecast 1-25-07
BPO: Forecast early February
CLE: Looking in early January but pinpointing a date
CRDN: Researching the next date
CTSH: 2-9-07
DRI: Researching the date. Still trying to get over the stomach ache from the e coli, but holding solid at support at 40.
FDX: Forecast 12-20-06. No split announced and you can figure out why with its very tepid outlook.
GILD: Tentatively forecast 1-31-07. Pretty ugly fall this month. Has rebounded to the 90 day SMA but needs more work.
GPRO: Researching the date.
JCI: Forecast 1-25-07. Nice break higher Wednesday.
JCP: Forecast 1-25-07
PLCE: Forecast mid-February
TRMB: Forecast 1-25-07
UNP: Tentatively set for 1-25-07
WWW: Forecast 1-2-07
XTO: Forecast with board meeting on 1-26-07
NEW PRE-ANNOUNCEMENT PLAYS:
Play Date: 12/21/2006
RNT (Aaron Rents--$27.67; -0.22; no options): Rent to own for those who just cannot wait for the credit card applications
BACKGROUND: Last announced a 3:2 split on 7-12-04 at $32.60. Before that a 3:2 split on 7-21-03 at $27.20.
http://biz.yahoo.com/p/r/rnt.html
STATUS: Breakout test. RNT broke higher out of a 7 month double bottom in mid-December, moving up to 29. It has tested this week, coming back to the 18 day EMA (27.43) on mostly lower volume. Thursday it tapped that level again and recouped its losses on a big shot of volume. Looking for some continued solid volume as it breaks higher and gives us the entry point.
Volume: 624.6K Avg Volume: 304.297K
BUY POINT: $28.15 Volume=456K Target=$32.95 Stop=$27.31
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/rnt.html
Play Date: 12/21/2006
WCN (Waste Connections--$41.16; -0.19; optionable): Waste management
BACKGROUND: Last announced a 3:2 split on 5-26-04 at $41.80
http://biz.yahoo.com/p/w/wcn.html
STATUS: Double bottom. Nice base on base pattern has set up as WCN works on a 9 week pattern after breaking out of a 6 month double bottom in October. Good action over the 50 day EMA (40.27) on this last base, showing the big buyers support their stock. Volume is edging up. Looking for a high volume breakout to give us the entry point.
Volume: 177.2K Avg Volume: 229.622K
BUY POINT: $41.75 Volume=344K Target=$48.00 Stop=$40.57
POSITION: WCN DH - Apr. $40c (67 delta) &/or Stock
http://www.investmenthouse.com/cs/wcn.html
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 12/05/2006
CRDN (Ceradyne--$55.31; -0.06; optionable): Body armor
BACKGROUND: Announced a 3:2 split on 12-20-04 at $53.20. Prior to that a 3:2 split on 3-11-04 at $34.20.
http://biz.yahoo.com/p/c/crdn.html
STATUS: Double bottom w/handle. Still working on a very nice, low volume handle to its 9 month base. Working laterally over the 18 day EMA (54.43) and ready to make the breakout and run toward a new all-time high. Money flow is surging higher ahead of price. Just need to see the breakout on some solid volume.
Volume: 218.863K Avg Volume: 829.317K
BUY POINT: $56.55 Volume=845K Target=$67.95 Stop=$54.95
POSITION: AUE CK - Mar. $55c (58 delta) &/or Stock
http://www.investmenthouse.com/ci/crdn.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 12/18/2006
EZPW (Ezcorp--$16.08; +0.38; optionable): EZ Pawn shops
http://biz.yahoo.com/p/e/ezpw.html
STATUS: Test 18 day EMA. Nice test of the 50 day EMA intraday this week and starting higher Thursday on rising, above average volume. Looks ready to continue the breakout move. To recap: EZPW split last week, coming back from an early December bounce higher to 17. It has come back the past two weeks, holding the 18 December 2006 (16.01) on lower, below average volume. It has held at this level that is also the November high. Nice leader that held the test and looks ready to resume the move to a new all-time high.Volume: 996.159K Avg Volume: 1.541M
BUY POINT: $16.65 Volume=2M Target=$19.98 Stop=$15.66
POSITION: ULP CC - Mar. $15c (71 delta) &/or Stock
http://www.investmenthouse.com/cs/ezpw.html
Play Date: 12/20/2006
HCP (Health Care Properties--$35.98; -0.30; optionable): Healthcare facility REIT
http://biz.yahoo.com/p/h/hcp.html
STATUS: Test 18 day EMA. Still holding the move though faded modestly Thursday to close right on the 10 day EMA on low volume. Remains set to make the breakout move. To recap: HCP broke out from a multiyear ascending triangle in August. It rallied and then formed a short 6 week double bottom and then broke higher again in mid-November. After that last surge it has spent December testing, coming back to the 18 day EMA this week and showing a nice doji at that level on Tuesday. Volume jumped above average Wednesday as HCP started to rebound. Great action and ready to move in as HCP extends this bounce.
Volume: 1.217M Avg Volume: 1.388M
BUY POINT: $36.55 Volume=1.4M Target=$43.85 Stop=$35.32
POSITION: HCP DG - Apr. $35c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/hcp.html
Play Date: 12/18/2006
IIVI (Ii-Vi, Inc.--$27.25; -0.12; optionable): Materials and products for precision use in medical, military, aerospace, security, etc.
http://biz.yahoo.com/p/i/iivi.html
STATUS: Ascending base. Gapped higher Thursday but could not hold the move as volume was remarkably low. Still right there, just needs a catalyst to continue that strong Tuesday break higher. To recap: Some nice volume to start the week as IIVI jumped off a test of the 50 day EMA in its 10 week base. Used the 50 day EMA as support on the lows as it consolidated the breakout from a summertime base; good stepping stones for the breakout to a new all-time high. Excellent action and looking to take some positions on a continued strong move and then more on a successful test. Leader in its sector.
Volume: 91.008K Avg Volume: 258.178K
BUY POINT: $27.55 Volume=270K Target=$32.98 Stop=$26.22
POSITION: JIU DE - Apr. $25c (72 delta) 7/or Stock
http://www.investmenthouse.com/cs/iivi.html
Play Date: 12/18/2006
SYK (Stryker--$55.20; -0.24; optionable): Medical instruments (orthopedic products)
http://biz.yahoo.com/p/s/syk.html
STATUS: Breakout test. Low volume lateral move over the 10 day EMA (54.83) continues as SYK continues setting up to resume the breakout move. Nice pattern but just a quiet time in the market to send it higher. To recap: SYK is working laterally to test last week's breakout from a short 6 week cup with handle base that is part of a much larger 17 month double bottom with handle base. Strong volume on the breakout move and then lower trade the pat two sessions as it works laterally over the 10 day EMA (54.59), refusing to give up the gains. May wait for the 10 day EMA to rise to meet it; that is often the thing that sends a stock higher once more. Excellent leader in excellent shape to continue the move higher.
Volume: 696.8K Avg Volume: 1.306M
BUY POINT: $55.55 Volume=1.4M Target=$63.95 Stop=$54.05
POSITION: SYK CK - Mar. $55c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/syk.html
CONTINUING LEADERS:
Play Date: 12/16/2006
BA (Boeing--$89.94; -0.16; optionable): Airplanes
http://biz.yahoo.com/p/b/ba.html
STATUS: Breakout test. Still testing, still holding the 18 day EMA (89.50) on below average volume, just biding its time for the next break higher. It is set to make the move but the current sleepy action is not conducive to the breakout just yet. Still solid. To recap: BA has formed a 4 week ascending triangle that is consolidating the strong November breakout and run higher to 92. That move took it out of a 6 month base, airing it out a bit, so to speak. It is making higher lows along the 18 day EMA as it bumps up into the 91 to 92 range that is the top of the pattern. Strongest volume of the month Friday as it continued the last bounce off the 18 day EMA. It was expiration, but some large caps were under accumulation. Looking to move in as BA continues higher on volume and clears the closing highs short term downtrend in this pattern. BA is a strong stock that has reached that $90 level that often is just a stopover on the way to 100. We are looking to grab onto that move.
Volume: 2.818M Avg Volume: 4.542M
BUY POINT: $91.05 Volume=6.5M Target=$100.00 Stop=$89.22
POSITION: BA ER - May $90c (57 delta)
http://www.investmenthouse.com/cs/ba.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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