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Begin part 3 of 3
THE PLAYS:
Good movers: AMAG; BIDU; COH; FRX; GS; HRS; INFY; LEH; MER; SYK; TECH; TRMB; WFR
New Plays:
New Post-Split Plays:
Play Date: 01/11/2007
FCFS (First Cash Financial--$23.71; +0.11; optionable): Credit services
http://biz.yahoo.com/p/f/fcfs.html
STATUS: Test breakout. FCFS gapped out of a rangy 8 month base in late December on word it was going to the SP600. It fell right back down, filling the gap but holding the 18 day EMA (23.41), checking up the selling there. It has worked laterally the past week using that level as support. It is holding the breakout and looking for this solid stock to rebound and resume the breakout. Solid growth fundamentals to go with the pattern.
Volume: 401.371K Avg Volume: 349.343K
BUY POINT: $24.15 Volume=500K Target=$28.95 Stop=$23.26
POSITION: FQO FX - Jun $22.50c (67 delta, no OI) &/or Stock
http://www.investmenthouse.com/cs/fcfs.html
Play Date: 01/11/2007
NICE (Nice-Systems--$31.83; +0.57; optionable): Computer peripherals
http://biz.yahoo.com/p/n/nice.html
STATUS: Test 50 day EMA. Broke out of a 5 month double bottom in October, rallying to 32. It tested the 50 day EMA (31.30) and then rebounded sharply. Once more it is testing the 50 day EMA again, bouncing higher Thursday on rising, slightly above average volume. Good test after making a new 6 year high. Money flow is moving higher ahead of price and NICE was moving well Thursday, following it higher.
Volume: 314.573K Avg Volume: 283.087K
BUY POINT: $32.05 Volume=350K Target=$37.95 Stop=$30.65
POSITION: EQJ EF - May $30c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/nice.html
Play Date: 01/11/2007
RMD (Resmed--$50.82; +1.26; optionable): Medical appliances
http://biz.yahoo.com/p/r/rmd.html
STATUS: Flying plateau. RMD is breaking higher from a 6 week lateral move that is consolidating the November breakout and run higher from a 17 week cup with handle base. No volume to accompany Thursdays move, but looking for some better trade to kick in as it continues higher. Solid stock, perennial leader ready for a new high.
Volume: 328.9K Avg Volume: 590.095K
BUY POINT: $51.08 Volume=650K Target=$58.95 Stop=$49.18
POSITION: RMD DJ - Apr. $50c (60 delta) or RMD GJ - July $50c (52 delta, low OI) &/or Stock
http://www.investmenthouse.com/cs/rmd.html
Technical Trade:
Play Date: 01/11/2007
VRSN (Verisign--$24.61; +0.15; optionable): Internet security
http://biz.yahoo.com/p/v/vrsn.html
STATUS: Test 50 day EMA. Something of a technical trade here of a different sort. Back in the summer of 2005 (sounds like a song title) VRSN double topped and then gapped lower. Since then it worked lower, forming something of a big 18 month double bottom with handle. It broke higher in late November on a good outlook, then faded back to the 50 day EMA (23.77) to test the move, working laterally the past two weeks in a tight range. We are looking for some good volume as VRSN comes off the 50 day EMA and starts the run to fill that gap. That is roughly our initial target, but it has plenty of room to run and we will let it do so as long as it will.
Volume: 3.137M Avg Volume: 3.074M
BUY POINT: $24.82 Volume=4.5M Target=$28.95 Stop=$23.88
POSITION: QVR FE - June $25c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/vrsn.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. Not giving a split announcement and starting to struggle too much.
BIDU: Researching date.
BPO: Forecast early February
CLE: Looking in early January but pinpointing a date. Still moving higher but needs some more trade.
CRDN: Tentatively forecast early February
CTSH: 2-9-07. Nice break higher from the 50 day EMA.
DRI: Researching the date
FFIV: Potential split announcement 1-24-07
GILD: Tentatively forecast 1-31-07. Much better, clearing the 50 day EMA on rising, above average volume. Watching for a shot at a new position.
GPRO: Researching the date.
JCI: Forecast 1-25-07
JCP: Forecast 1-25-07. Starting to recover here with something of a double bottom. Operative word is something.
RNT: Tentatively forecast third week of January
TRMB: Forecast 1-25-07
UNP: Tentatively set for 1-25-07
VIVO: Forecast mid-February
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: 01/11/2007
ATI (Allegheny Technologies--$90.41; +1.76; optionable): Industrial metals
BACKGROUND: No splits in ATI's history
http://biz.yahoo.com/p/a/ati.html
STATUS: Double bottom. ATI has formed a base on base the past 9 months. First a 6.5 month cup with handle that broke out in late November and ran to 99. It turned back down sharply and fell into the current 5 week double bottom that has used the 50 day EMA (85.44) as support. Volume jumped up to average again Thursday as ATI cleared 90. Solid money flow setting ATI up for a new high. It has crossed the 90 threshold, and in an uptrending market a strong stock will make a run toward 100 that we can jump on.
Volume: 2.899M Avg Volume: 2.864M
BUY POINT: $90.88 Volume=3.2M Target=$99.90 Stop=$88.45
POSITION: ATI DR - Apr. $90c (56 delta)
http://www.investmenthouse.com/ci/ati.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 01/04/2007
BAX (Baxter Intl.--$47.10; +0.32; optionable): Medical instruments
http://biz.yahoo.com/p/b/bax.html
STATUS: Reverse head and shoulders. Some solid volume the past two sessions as BAX comes off a tap toward the 50 day EMA (45.72) on the Wednesday low. It flirted with the breakout Thursday. Very close to making the getaway move, following the strong money flow higher.
Volume: 2.922M Avg Volume: 2.289M
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: 01/10/2007
IIVI (Ii-Vi, Inc.--$29.26; +0.15; optionable): Lasers for precision industrial, military, medical, aerospace industries
http://biz.yahoo.com/p/i/iivi.html
STATUS: Breakout test. Held steady Thursday on lower, below average volume, posting a modest gain on the session. May move laterally a couple more sessions before it is ready but like how it is holding its gain. To recap: After a nice breakout and jog higher from its 8 week ascending base, IIVI is testing, tapping at the 10 day EMA (28.74) on the Wednesday low and rebounding on a nice shot of rising, above average volume. Another first test of the breakout that looks successful and ready to yield the next run higher.
Volume: 159.144K Avg Volume: 225.44K
BUY POINT: $29.48 Volume=295K Target=$34.95 Stop=$27.98
POSITION: JIU DF - Apr. $30c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/iivi.html
Play Date: 01/06/2007
TJX (TJ Max--$29.94; +0.45; optionable): Discount department stores
http://biz.yahoo.com/p/t/tjx.html
STATUS: Reverse head and shoulders. Price was moving Thursday and volume was up, but it was still well below average on the move. Money flow is solid and we really like the pattern and accumulation. Breaking to a new high and looking pretty solid. To recap: 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: 2.452M Avg Volume: 3.231M
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
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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