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us stock market, trade stock
Begin part 3 of 3
THE PLAYS:
Good movers: COH; CTRP; HCP; HRS
New Plays:
New Post-Split Plays:
Play Date: 01/06/2007
QLGC (Qlogic--$21.86; -0.19; optionable): Storage network infrastructure products
http://biz.yahoo.com/p/q/qlgc.html
STATUS: Test breakout. Taking another look at QLGC as it continues to consolidate the November run higher that followed the October breakout from a 6 month cup with handle base. Solid run to 22.94 on the breakout and then testing back in December into last week, tapping at the 50 day EMA (21.42) on the intraday lows before rebounding to cut its losses. Nice doji Friday over the 50 day. Has all the attributes: good pattern, good breakout and run, nice, orderly test. Just needs to show us the break higher on solid trade.
Volume: 1.965M Avg Volume: 2.364M
BUY POINT: $22.32 Volume=3.5M Target=$26.85 Stop=$21.38
POSITION: QLC GD - July $20c (71 delta, low OI) or QLC GX - July $22.50c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/qlgc.html
Play Date: 01/06/2007
TJX (TJ Max--$29.08; -0.64; optionable): Discount department stores
http://biz.yahoo.com/p/t/tjx.html
STATUS: Reverse head and shoulders. Retail is mixed, but TJX is showing excellent action as it flirts with the breakout from an 11 week base that is consolidating its August to November run. Excellent pattern showing excellent 6 to 1 accumulation (6 up price weeks on rising volume to 1 down price weeks on rising volume) shows a lot of buying here as it rests and sets up for another breakout and another new high. Strong surge Thursday then a give back Friday on lower volume that still held the 10 day EMA on the intraday low. Solid all around and just waiting for the breakout move on strong volume to give us the entry point.
Volume: 3.291M Avg Volume: 3.381M
BUY POINT: $29.88 Volume=5.1M Target=$35.85 Stop=$28.48
POSITION: TJX DF - Apr. $30c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/tjx.html
Leader Play:
Play Date: 01/06/2007
BSC (Bear Stearns--$162.32; -0.32; optionable): Investment brokerage
http://biz.yahoo.com/p/b/bsc.html
STATUS: Test 18 day EMA. This one could easily be a pre-announcement split play, but there are no splits in BSC's history and it has been content to let prices run higher. In any event, we are going to treat it as a solid play and if we get a split, all the better. Broke out in October from a 22 week base and has bounced higher, making two bounces up the 18 day EMA (161.49) as it trends higher. It has come back from 165 the past two weeks, once more tapping at the 18 day EMA last week on the lows, finding support at that level. Looking for yet another bounce up off this level, and we want to take advantage of that move as a nice little trade. A move to the target gives us an 80%ish option gain, but if we get a strong surge for a couple of sessions that then it stalls we will take some interim gain.
Volume: 1.327M Avg Volume: 1.351M
BUY POINT: $162.75 Volume=2M Target=$179.00 Stop=$160.78
POSITION: BSC DM - Apr. $165c (51 delta)
http://www.investmenthouse.com/ct/bsc.html
Play Date: 01/06/2007
WFR (Memc Electronic--$40.29; -0.76; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/w/wfr.html
STATUS: Cup w/handle. Testing the 50 day EMA (39.32) the past two weeks, forming the bottom of the handle to the 8 month base. Showing some strong volume this week as it started up off this support level, tapping it intraday Friday and rebounding to recoup much of the Friday downside. This base is setting up a breakout to push WFR toward a new all-time high. Strong 10 to 6 accumulation in the base (10 up price weeks on rising volume to 6 down price weeks on rising volume) shows plenty of buying to send it higher.
Volume: 2.901M Avg Volume: 4.047M
BUY POINT: $41.35 Volume=5.5M Target=$47.95 Stop=$39.32
POSITION: WFR DH - Apr. $40c (55 delta) or WFR GH - July $40c (52 delta) &/or Stock
http://www.investmenthouse.com/cs/wfr.html
Downside:
Play Date: 01/06/2007
TEK (Tektronix--$28.76; -0.87; optionable): Products for global communications networks
http://biz.yahoo.com/p/t/tek.html
STATUS: Put. TEK tried to form a handle in Q4 2006, but it instead turned into a broad top that cracked to the downside in mid-December with a nasty plunge as it reported earnings and warned about the future. It fought back, tapping at the 50 day EMA (29.76) Thursday. Then it turned over Friday and undercut all the lows of the week. Money flow is in the tank, and after this kiss goodbye TEK is ready to follow it lower again. A move to the target lands us a 43%ish gain.
Volume: 778.5K Avg Volume: 601.873K
BUY POINT: $28.54 Volume=610K Target=$27.21 Stop=$29.04
POSITION: TEK NF - Feb. $30p (-64 delta)
http://www.investmenthouse.com/cs/tek.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.
BCR: Forecast mid-January
BDX: Forecast 1-25-07
BEC: Tentatively forecast first week of January. Big gap higher Wednesday but could not hold the move. No announcement yet, but holding up in the pattern.
BPO: Forecast early February
CLE: Looking in early January but pinpointing a date. Flat same store sales but nice rebound Thursday keeps it above the 18 day EMA and still in the hunt for a breakout.
CRDN: Tentatively forecast early February
CTSH: 2-9-07. Still struggling to take back the 50 day EMA, but it sure is a struggle.
DRI: Researching the date
FFIV: Potential split announcement 1-24-07
GILD: Tentatively forecast 1-31-07. Slumped down to the 200 day SMA and bounced to end the week but still below the 10 day EMA on this bounce back.
GPRO: Researching the date.
JCI: Forecast 1-25-07
JCP: Forecast 1-25-07
RNT: Tentatively forecast third week of January
TRMB: Forecast 1-25-07
UNP: Tentatively set for 1-25-07
WCN: Forecast third week of January
WWW: Ended the week poorly.
XTO: Forecast with board meeting on 1-26-07. Hanging onto the 200 day SMA after an ugly Thursday drop.
NEW PRE-ANNOUNCEMENT PLAYS:
Play Date: 01/06/2007
VIVO (Meridian Biosciences--$25.00; +0.35; optionable): Diagnostic substances. Forecast mid-February.
BACKGROUND: Last announced a 3:2 split on 8-15-05 at $25.60.
http://biz.yahoo.com/p/v/vivo.html
STATUS: Double bottom w/handle. A sweet pattern has set up, a base on base over the past 8 months. The current pattern is a 7 week double bottom with handle on the heels of a 6 month reverse head and shoulders pattern. That double base pattern tends to weed out the sellers for explosive breakouts. Indeed, VIVO has bumped against resistance at 25 for a month, crowding that line. Made a higher low at the 18 day EMA (24.57) the past week, and that often precedes the breakout move.
Volume: 198.993K Avg Volume: 146.516K
BUY POINT: $25.44 Volume=220K Target=$29.95 Stop=$24.22
POSITION: ZUG DE - Apr. $25c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/vivo.html
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 01/04/2007
FFIV (F5 Networks--$75.16; -1.20; optionable): Networking solutions to manage application traffic on networks
BACKGROUND: No splits in FFIV's history.
http://biz.yahoo.com/p/f/ffiv.html
STATUS: Flying plateau. Faded back to close right at the 10 day EMA (74.83) on Friday as volume fell back from average. It remains well positioned to make the break higher from this lateral consolidation from a strong Q4 run. To recap: FFIV is back in NASDAQ compliance with NASDAQ listing requirements, and that likely removes the last barrier before the next breakout. It made us some strong coin in the run from the August low, making a strong breakout from a 7 month cup with handle base in October and rallying on up to December. It then took a breather as the market turned choppy, working laterally along the 18 day EMA (74.42). Shakeout on Thursday and an intraday recovery. Then a good bounce higher Thursday on rising, average trade. Nice action showing renewed buying. Looking to move in on some more solid upside with good trade as FFIV heads for a new all-time high.
Volume: 597.527K Avg Volume: 947.649K
BUY POINT: $76.87 Volume=1.1M Target=$91.95 Stop=$73.35
POSITION: FLK DO - Apr. $75c (60 delta) or FLK DP - Apr. $80c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/ffiv.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 01/04/2007
BAX (Baxter Intl.--$46.79; -0.19; optionable): Medical instruments
http://biz.yahoo.com/p/b/bax.html
STATUS: Reverse head and shoulders. Strong price and volume move Thursday, then backed off Friday, showing a doji as it tapped the 10 day EMA (46.51) on the low and rebounded for a modest loss. Very nice pattern and looking solid for a breakout. To recap: Solid volume push back above average Thursday as BAX heads for the breakout from its 11 week base, looking for a 4.5 year high. Sweet little pattern sporting 3 to 1 accumulation (3 up price weeks on rising volume to 1 down price weeks on rising volume) that is consolidating a nice July breakout and run higher into October. Strong money flow is moving higher ahead of the stock price. Tech and healthcare enjoyed a strong session as money moved in. BAX looks to benefit from that redirecting of money.
Volume: 3.158M Avg Volume: 2.264M
BUY POINT: $47.22 Volume=2.4M Target=$54.45 Stop=$46.04
POSITION: BAX EW - May $47.50c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/bax.html
Play Date: 01/04/2007
BRCM (Broadcom--$32.31; -0.06; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/b/brcm.html
STATUS: Test 200 day SMA. Received a downgrade Friday, undercutting the 200 and 50 day MA (32.53 and 32.41, respectively) but rebounding by the close to hold the 50 day EMA. It hit some support at 32 on the low and rebounded on strong volume; not a great session, but that rebound was good to see. Still in position to make the move and just looking for the next bounce to move in. To recap: Getting right back after BRCM as it held onto near support and on Thursday jumped off the 200 day SMA that it has tangoed with for the past month. Not huge volume on the Thursday move despite the solid price move; will need to see more volume as it continues back up after this test. Plenty of room to bounce and run higher if there is really money moving into the big techs.
Volume: 5.097M Avg Volume: 15.127M
BUY POINT: $33.78 Volume=17M Target=$42.45 Stop=$32.36
POSITION: RCQ EZ - May $32.50c (63 delta) &/or Stock
http://www.investmenthouse.com/cs/brcm.html
Play Date: 12/28/2006
CBG (CB Richard Ellis--$33.10; -0.24; optionable): Property management
http://biz.yahoo.com/p/c/cbg.html
STATUS: Flying plateau. Still hanging in the pattern, making a higher low at the 18 day EMA (32.98) as it faded modestly Friday on continued low, below average volume. Nice pullback that is giving it a good ramp to run higher to the next breakout. To recap: Stronger volume Wednesday as CBG crouched for the breakout, but Thursday it could not make the move with the market as volume faded back and it did to, down to the 10 day EMA. Friday it was more of the same. Still in excellent shape to make a higher low and the breakout. Just have to see it. Very solid.
Volume: 1.353M Avg Volume: 2.634M
BUY POINT: $34.11 Volume=3.9M Target=$40.95 Stop=$32.72
POSITION: CBG FF - June $30c (75 delta) &/or Stock
http://www.investmenthouse.com/cs/cbg.html
Play Date: 12/28/2006
GRMN (Garmin Ltd.--$54.88; -0.18; optionable): GPS devices
http://biz.yahoo.com/p/g/grmn.html
STATUS: Ascending base. GRMN broke higher a week back though volume was less than stellar on the move. It bumped up against 57 but could not make a clean getaway without more trade. Last week it slid back, tapping at near support at the 18 day EMA (54.13) intraday before rebounding to cut its losses. This pullback still keeps it right at the top of its 6 month base, and gives it a good launch pad for a breakout move. Want to see that trade level pick up as it tries the break higher once again.
Volume: 2.646M Avg Volume: 2.968M
BUY POINT: $56.55 Volume=4.5M Target=$66.45 Stop=$54.48
POSITION: GQR DK - Apr. $55c (63 delta) &/or Stock
http://www.investmenthouse.com/cs/grmn.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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